-----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, D43hj/kTi6+uef2F1BvWfMHcLkhLwYr0JPuykWp7IWXoa4FuGwwgv3GLOA173Zz+ Au5YaEpgZtDsc49YpbZrJQ== 0000088808-03-000011.txt : 20030908 0000088808-03-000011.hdr.sgml : 20030908 20030908105423 ACCESSION NUMBER: 0000088808-03-000011 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20030630 FILED AS OF DATE: 20030908 EFFECTIVENESS DATE: 20030908 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SELECTED AMERICAN SHARES INC CENTRAL INDEX KEY: 0000088808 IRS NUMBER: 510099358 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-00051 FILM NUMBER: 03885275 BUSINESS ADDRESS: STREET 1: 2949 E. ELVIRA ROAD STREET 2: SUITE 101 CITY: TUCSON STATE: AZ ZIP: 85706 BUSINESS PHONE: (520)806-7600 MAIL ADDRESS: STREET 1: 2949 E. ELVIRA ROAD STREET 2: SUITE 101 CITY: TUCSON STATE: AZ ZIP: 85706 N-CSRS 1 ncsr_sas.txt CERTIFIED SHAREHOLDER REPORT UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-00051 Selected American Shares, Inc. (Exact name of registrant as specified in charter) 2949 East Elvira Road, Suite 101 Tucson, Arizona 85706 (Address of principal executive offices) Thomas D. Tays Davis Selected Advisers, LP 2949 East Elvira Road, Suite 101 Tucson, Arizona 85706 (Name and address of agent for service) Registrant's telephone number, including area code: (520) 806-7600 Date of fiscal year end: December 31 Date of reporting period: June 30, 2003 ITEM 1. REPORTS TO STOCKHOLDERS SELECTED FUNDS SEMI-ANNUAL REPORT June 30, 2003 SELECTING QUALITY COMPANIES FOR THE LONG TERM(TM) Selected American Shares Selected Special Shares SELECTED Selected U.S. Government Income Fund FUNDS Selected Daily Government Fund TABLE OF CONTENTS Shareholder Letter............................................................2 Management's Discussion and Analysis: Selected American Shares.................................................3 Selected Special Shares..................................................4 Selected U.S. Government Income Fund.....................................5 Schedule of Investments: Selected American Shares.................................................7 Selected Special Shares.................................................11 Selected U.S. Government Income Fund....................................14 Selected Daily Government Fund..........................................16 Statements of Assets and Liabilities.........................................19 Statements of Operations.....................................................20 Statements of Changes in Net Assets..........................................21 Notes to Financial Statements................................................23 Financial Highlights: Selected American Shares................................................28 Selected Special Shares.................................................29 Selected U.S. Government Income Fund....................................30 Selected Daily Government Fund..........................................31 Directors and Officers.......................................................32 SELECTED FUNDS 2949 East Elvira Road, Suite 101 Tucson, Arizona 85706 ================================================================================ Dear Fellow Shareholder, As stewards of our customers' savings, the management team and Directors of the Selected Funds recognize the importance of candid, thorough and regular communication with our shareholders. In our annual and semi-annual reports, we include all of the required quantitative information, such as audited financial statements, detailed footnotes, performance reports, fund holdings, a list of each individual purchase or sale and a new section on performance attribution. In addition we produce a semi-annual Research Report. In this report, we give a more qualitative perspective on fund performance, discuss our thoughts on individual holdings, and share our investment outlook. You may obtain a copy of the current Research Report either at our website, SelectedFunds.com, or by calling 1-800-243-1575. Sincerely, /s/ James J. McMonagle /s/ Christopher C. Davis - ---------------------- ------------------------ James J. McMonagle Christopher C. Davis Chairman President August 7, 2003 2 SELECTED FUNDS 2949 East Elvira Road, Suite 101 Tucson, Arizona 85706 ================================================================================ MANAGEMENT'S DISCUSSION AND ANALYSIS EQUITY MARKET ENVIRONMENT During the six months ended June 30, 2003, the stock market, as measured by the Standard & Poor's 500(R) Index, returned 11.76% and the Wilshire 5000 Index returned 12.91%.(1) This performance reflected a vigorous rally over the last three months. In the first three months, stock prices were depressed by investor apprehension about geopolitical tensions and generally glum economic news. Although the U.S. military campaign in Iraq was brief and successful, economic uncertainty remained. Consumer spending stayed strong, but the job market deteriorated. The broad economy registered anemic growth. In March the market increased, and it continued in a positive trend through the end of June. SELECTED AMERICAN SHARES PERFORMANCE OVERVIEW Selected American Shares returned 11.60% for the six-month period ended June 30, 2003(2), compared with a return of 11.76% for the Standard & Poor's 500(R) Index.(1) The Fund's investment strategy is to seek out growing companies that can be purchased at value prices and held for the long-term. Typically, the Fund invests the majority of its assets in equity securities issued by large companies with market capitalizations of at least $10 billion. The Fund's largest sector weightings were in banks and savings & loans and financial services. The Fund's financial services holdings outperformed the S&P 500(R) Index, while the Fund's banks and savings & loan holdings underperformed the S&P 500(R) Index. The Fund's cash position reduced relative performance during the strong bull market. The principal holdings contributing to performance were: Progressive Corporation(3), a property/casualty insurance company, American Express, a financial services company and Costco, a retailing company. The Fund held substantial positions in all three companies and all three did well over the six-month period, Progressive Corporation increased by 47.41%, American Express by 18.55% and Costco by 30.43%. The principal detractors from performance were: Kraft Foods, a food/beverage & restaurants company, Safeway, a retailing company and Tellabs, a telecommunications company. Over the six-month period, Kraft Foods decreased by 15.55% and Safeway decreased by 12.41%. Tellabs decreased by 15.41% prior to being sold. TOP 10 HOLDINGS AS OF JUNE 30, 2003 % OF NET ASSETS - ----------------------------------- --------------- American Express Co. 7.52% Altria Group, Inc. 5.85% American International Group, Inc. 5.32% Citigroup Inc. 4.11% Progressive Corp. (Ohio) 3.81% Wells Fargo & Co. 3.80% Sealed Air Corp. 3.69% Berkshire Hathaway Inc., Class A 3.66% HSBC Holdings PLC 3.66% Costco Wholesale Corp. 3.60% 3 SELECTED FUNDS 2949 East Elvira Road, Suite 101 Tucson, Arizona 85706 ================================================================================ MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED SELECTED SPECIAL SHARES PERFORMANCE OVERVIEW Selected Special Shares returned 16.72% for the six-month period ended June 30, 2003(2), compared with a return of 12.91% for the Wilshire 5000 Index.(1) The Fund's investment strategy is to seek out growing companies that can be purchased at value prices and held for the long-term. Under normal circumstances, the Fund invests the majority of its assets in equity securities issued by companies with market capitalizations less than $20 billion. The Fund's largest sector weightings were in retailing, media and electronics. The Fund's holdings in each of the three sectors outperformed the Wilshire 5000 Index and contributed to the Fund's strong performance. The principal holdings contributing to performance were: Monster Worldwide(3), a media company, Tiffany & Co, a retailing company and Applied Materials, an electronics company. Monster Worldwide increased by 86.19% prior to being sold. Over the six month period Tiffany & Co. increased by 37.10% and Applied Materials increased by 21.57%. The principal detractors from performance were: DST Systems, an information/information processing company; Duane Reade, a retailing company and Speedway Motorsports, a race track company. DST Systems decreased by 21.18%, Duane Reade decreased by 25.41% and Speedway Motorsports decreased by 15.17% prior to being sold. TOP 10 HOLDINGS AS OF JUNE 30, 2003 % OF NET ASSETS - ------------------------------------ --------------- Tiffany & Co. 4.72% AutoNation, Inc. 4.70% Sigma-Aldrich Corp. 3.65% AutoZone, Inc. 3.54% BlackRock, Inc. 3.25% Transatlantic Holdings, Inc. 3.09% Golden West Financial Corp. 2.97% Agilent Technologies, Inc. 2.92% Applied Materials, Inc. 2.90% Altria Group, Inc. 2.87% 4 SELECTED FUNDS 2949 East Elvira Road, Suite 101 Tucson, Arizona 85706 ================================================================================ MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED GOVERNMENT BOND MARKET ENVIRONMENT Government Bonds rallied in the second quarter amidst lingering questions regarding the strength of the U.S. economy. First-quarter GDP growth was revised down to a slower-than-expected 1.4% annualized rate, and the jobless rate hit 6.4% in June (a 9-year high). However, consumer confidence rose sharply during the second quarter, as major fighting in Iraq ended, and investors began to anticipate improvements in the economy. In May, Congress approved a $350 billion tax cut package, which also helped lift sentiment. The Federal Reserve lowered interest rates in June by 25 basis points, cutting the federal funds rate to 1.00% (the lowest level in 45 years), stating it had yet to see signs of sustainable economic growth. SELECTED U.S. GOVERNMENT INCOME FUND PERFORMANCE OVERVIEW Selected U.S. Government Income Fund returned 1.74% for the six-month period ended June 30, 2003(2), compared with a return of 2.39% for the Lehman Brothers Intermediate Term U.S. Treasury Securities Index.(1) The Fund's investment strategy, under normal circumstances, is to invest exclusively in U.S. Government Securities and repurchase agreements collateralized by U.S. Government Securities. The Fund's largest sector weighting was in mortgage-backed securities, with lesser investments in agency bonds and direct treasury bonds. This large commitment to mortgage-backed securities hurt the Fund's relative performance as both the agency bond market and direct treasury bond market outperformed the mortgage-backed securities market over the six month period. - ---------------------------------------- This Semi-Annual Report is authorized for use by existing shareholders. Prospective shareholders must receive a current Selected Funds prospectus, which contains more information about risks, fees and expenses. Please read the prospectus carefully before investing or sending money. Selected American Shares' investment objective is to achieve both capital growth and income. In the current market environment, we expect that income will be low. There can be no assurance that the Fund will achieve its objective. The primary risks of an investment in Selected American Shares are: (1) market risk, (2) company risk, (3) headline risk and (4) selection risk. See the prospectus for a full description of each risk. Selected Special Shares' investment objective is capital growth. There can be no assurance that the Fund will achieve its objective. The primary risks of an investment in Selected Special Shares are: (1) market risk, (2) company risk, (3) small and medium capitalization risk, (4) headline risk and (5) selection risk. See the prospectus for a full description of each risk. Selected U.S. Government Income Fund's investment objective is to obtain current income consistent with preservation of capital by investing principally in U.S. Government Securities. There can be no assurance that the Fund will achieve its objective. The primary risks of an investment in Selected U.S. Government Income Fund is interest rate risk, consisting of both: (1) price volatility risk and (2) extension and prepayment risk. See the prospectus for a full description of each risk. 5 SELECTED FUNDS 2949 East Elvira Road, Suite 101 Tucson, Arizona 85706 ================================================================================ MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED (1) The definitions of indices quoted in this report appear below. Investments cannot be made directly in the indices. I. The S&P 500(R) Index is an unmanaged index of 500 selected common stocks, most of which are listed on the New York Stock Exchange. The index is adjusted for dividends, weighted towards stocks with large market capitalizations, and represents approximately two-thirds of the total market value of all domestic common stocks. II. The Wilshire 5000 Index measures the performance of all U.S. headquartered equity securities with readily available price data. Over 6,500 capitalization weighted security returns are used to adjust the index. The Wilshire 5000 is a broad measure of the entire U.S. stock market. III. The Lehman Brothers Intermediate Term U.S. Treasury Securities Index is a recognized unmanaged index of U.S. Government Securities performance. (2) Total return assumes reinvestment of dividends and capital gain distributions. Past performance is not a guarantee of future results. Investment return and principal value will vary so that, when redeemed, an investor's shares may be worth more or less than when purchased. The following table lists the average annual total returns for the periods ended June 30, 2003. - ------------------------------------ ------------ ------------- --------------- FUND NAME 1 YEAR 5 YEARS 10 YEARS - ------------------------------------ ------------ ------------- --------------- Selected American Shares 3.59% 2.41% 12.09% - ------------------------------------ ------------ ------------- --------------- Selected Special Shares 3.56% (0.07%) 9.02% - ------------------------------------ ------------ ------------- --------------- Selected U.S. Government Income 5.62% 5.20% 5.35% - ------------------------------------ ------------ ------------- --------------- Fund performance changes over time and current performance may be higher or lower than stated. For more current information please call Selected Funds Shareholder Services at 1-800-243-1575. (3) This Management Discussion & Analysis discusses a number of individual companies. The information provided in this report does not provide information reasonably sufficient upon which to base an investment decision and should not be considered a recommendation to purchase or sell any particular security. The schedule of investments list each Fund's holdings of each company discussed. Shares of the Selected Funds are not deposits or obligations of any bank, are not guaranteed by any bank, are not insured by the FDIC or any other agency, and involve investment risks, including possible loss of the principal amount invested. 6 SELECTED FUNDS SCHEDULE OF INVESTMENTS SELECTED AMERICAN SHARES, INC. JUNE 30, 2003 (Unaudited)
VALUE SHARES SECURITY (NOTE 1) ======================================================================================================================= COMMON STOCK - (94.24%) BANKS AND SAVINGS & LOAN ASSOCIATIONS - (14.97%) 4,407,000 Bank One Corp. ..................................................................... $ 163,852,260 1,819,800 Golden West Financial Corp. ........................................................ 145,602,198 15,140,767 HSBC Holdings PLC................................................................... 179,187,486 6,353,544 Lloyds TSB Group PLC................................................................ 45,183,899 330,000 State Street Corp. ................................................................. 13,002,000 3,696,560 Wells Fargo & Co. .................................................................. 186,306,624 -------------- 733,134,467 -------------- BUILDING MATERIALS - (1.34%) 930,600 Martin Marietta Materials, Inc. .................................................... 31,277,466 924,100 Vulcan Materials Co. ............................................................... 34,256,387 -------------- 65,533,853 -------------- BUSINESS SERVICES - (1.04%) 1,241,000 D&B Corp.*.......................................................................... 51,005,100 -------------- CONSUMER PRODUCTS - (5.85%) 6,307,500 Altria Group, Inc. ................................................................. 286,612,800 -------------- DIVERSIFIED MANUFACTURING - (4.53%) 1,606,600 Dover Corp. ........................................................................ 48,133,736 9,139,764 Tyco International Ltd. ............................................................ 173,472,721 -------------- 221,606,457 -------------- ELECTRONICS - (0.87%) 10,192,500 Agere Systems Inc., Class A*........................................................ 23,748,525 1,195,000 Applied Materials, Inc.*............................................................ 18,940,750 -------------- 42,689,275 -------------- ENERGY - (5.47%) 2,070,080 ConocoPhillips...................................................................... 113,440,384 1,860,421 Devon Energy Corp. ................................................................. 99,346,481 1,313,100 EOG Resources, Inc. ................................................................ 54,940,104 -------------- 267,726,969 -------------- FINANCIAL SERVICES - (15.40%) 8,807,800 American Express Co. ............................................................... 368,254,118 4,704,189 Citigroup Inc. ..................................................................... 201,339,289 1,931,000 Loews Corp. ........................................................................ 91,316,990 1,132,800 Moody's Corp. ...................................................................... 59,709,888 1,957,400 Providian Financial Corp.*.......................................................... 18,125,524 296,010 Takefuji Corp. ..................................................................... 15,386,444 -------------- 754,132,253 -------------- FOOD/BEVERAGE & RESTAURANT - (3.09%) 6,876,588 Diageo PLC.......................................................................... 73,540,074 652,400 Hershey Foods Corp. ................................................................ 45,446,184
7 SELECTED FUNDS SCHEDULE OF INVESTMENTS SELECTED AMERICAN SHARES, INC. - CONTINUED JUNE 30, 2003 (Unaudited)
VALUE SHARES SECURITY (NOTE 1) ======================================================================================================================= COMMON STOCK - CONTINUED FOOD/BEVERAGE & RESTAURANT - CONTINUED 1,000,000 Kraft Foods Inc., Class A........................................................... $ 32,550,000 -------------- 151,536,258 -------------- HOTELS & MOTELS - (0.78%) 988,700 Marriott International, Inc., Class A............................................... 37,985,854 -------------- INDUSTRIAL - (3.69%) 3,786,700 Sealed Air Corp.*................................................................... 180,474,122 -------------- INSURANCE BROKERS - (1.04%) 2,112,700 Aon Corp. ......................................................................... 50,873,816 --------------- INVESTMENT FIRMS - (3.18%) 890,300 Janus Capital Group Inc. ........................................................... 14,600,920 315,099 Julius Baer Holding Ltd., Class B................................................... 77,399,281 1,489,864 Morgan Stanley...................................................................... 63,691,686 -------------- 155,691,887 -------------- LIFE INSURANCE - (0.60%) 658,000 Principal Financial Group, Inc. .................................................... 21,220,500 400,000 Sun Life Financial Services of Canada Inc. ......................................... 8,308,000 -------------- 29,528,500 -------------- MEDIA - (1.34%) 1,099,959 Lagardere S.C.A. ................................................................... 47,888,886 2,235,400 WPP Group PLC....................................................................... 17,550,748 -------------- 65,439,634 -------------- MULTI-LINE INSURANCE - (5.32%) 4,719,325 American International Group, Inc. ................................................. 260,412,354 -------------- PHARMACEUTICAL AND HEALTH CARE - (3.28%) 1,180,000 Eli Lilly and Co. .................................................................. 81,384,600 427,600 Merck & Co., Inc. .................................................................. 25,891,180 1,569,460 Pfizer Inc. ........................................................................ 53,597,059 -------------- 160,872,839 -------------- PROPERTY/CASUALTY INSURANCE - (8.45%) 2,475 Berkshire Hathaway Inc., Class A*................................................... 179,437,500 6,366 Berkshire Hathaway Inc., Class B*................................................... 15,469,380 288,400 Chubb Corp. ........................................................................ 17,304,000 20,000 Markel Corp.*....................................................................... 5,120,000 2,553,200 Progressive Corp. (Ohio)............................................................ 186,638,920 203,241 Travelers Property Casualty Corp., Class A.......................................... 3,231,532 417,570 Travelers Property Casualty Corp., Class B.......................................... 6,585,079 -------------- 413,786,411 -------------- PUBLISHING - (0.76%) 483,300 Gannett Co., Inc. .................................................................. 37,122,273 --------------
8 SELECTED FUNDS SCHEDULE OF INVESTMENTS SELECTED AMERICAN SHARES, INC. - CONTINUED JUNE 30, 2003 (Unaudited)
VALUE SHARES/PRINCIPAL SECURITY (NOTE 1) ======================================================================================================================= COMMON STOCK - CONTINUED REAL ESTATE - (1.97%) 77,000 Avalonbay Communities, Inc. ........................................................ $ 3,283,280 1,521,194 Centerpoint Properties Trust (b).................................................... 93,173,133 -------------- 96,456,413 -------------- REINSURANCE - (1.64%) 1,158,300 Transatlantic Holdings, Inc. ....................................................... 80,096,445 -------------- RETAILING - (5.18%) 4,817,000 Costco Wholesale Corp.*............................................................. 176,254,030 1,340,000 RadioShack Corp. ................................................................... 35,255,400 2,063,000 Safeway Inc.*....................................................................... 42,208,980 -------------- 253,718,410 -------------- TECHNOLOGY - (3.49%) 1,317,100 BMC Software, Inc.*................................................................. 21,508,243 1,428,600 Lexmark International, Inc.*........................................................ 101,102,022 1,880,000 Microsoft Corp. .................................................................... 48,146,800 -------------- 170,757,065 -------------- TRANSPORTATION - (0.96%) 740,500 United Parcel Service, Inc., Class B................................................ 47,169,850 -------------- Total Common Stock - (identified cost $3,865,636,599)...................... 4,614,363,305 -------------- SHORT TERM INVESTMENTS - (5.72%) $ 62,094,000 Banc of America Securities, LLC Joint Repurchase Agreement, 1.27%, 07/01/03, dated 06/30/03, repurchase value of $62,096,191 (collateralized by: U.S. Government obligations in a pooled cash account, total market value $63,335,880)................................................ 62,094,000 79,334,000 Nomura Securities International, Inc. Joint Repurchase Agreement, 1.27%, 07/01/03, dated 06/30/03, repurchase value of $79,336,799 (collateralized by: U.S. Government obligations in a pooled cash account, total market value $80,920,680)................................................ 79,334,000 30,058,000 Redwood Receivable Corp., 1.32%, 07/01/03........................................... 30,058,000
9 SELECTED FUNDS SCHEDULE OF INVESTMENTS SELECTED AMERICAN SHARES, INC. - CONTINUED JUNE 30, 2003 (Unaudited)
VALUE PRINCIPAL SECURITY (NOTE 1) ======================================================================================================================= SHORT TERM INVESTMENTS - CONTINUED $ 30,000,000 San Paolo IMI US Financial Co., 0.94%, 07/11/03.................................. $ 29,992,167 30,000,000 UBS Finance Delaware, LLC, 0.96%, 07/02/03....................................... 29,999,200 48,482,000 UBS Financial Services Inc. Joint Repurchase Agreement, 1.18%, 07/01/03, dated 06/30/03, repurchase value of $48,483,589 (collateralized by: U.S. Government obligations in a pooled cash account, total market value $49,451,640)............................................. 48,482,000 ---------------- Total Short Term Investments - (identified cost $279,959,367)........... 279,959,367 ---------------- Total Investments - (99.96%) - (identified cost $4,145,595,966) - (a)........ 4,894,322,672 Other Assets Less Liabilities - (0.04%)...................................... 2,203,104 ---------------- Net Assets - (100%)..................................................... $ 4,896,525,776 ================
*Non-Income Producing Security. (a) Aggregate cost for Federal Income Tax purposes is $4,154,823,432. At June 30, 2003, unrealized appreciation (depreciation) of securities for Federal Income Tax purposes is as follows:
Unrealized appreciation...................................................... $ 1,155,356,085 Unrealized depreciation...................................................... (415,856,845) ---------------- Net unrealized appreciation ............................................ $ 739,499,240 ================
(b) Affiliated company. Represents ownership of at least 5% of the voting securities of the issuer and is an affiliate, as defined in the Investment Company Act of 1940, at or during the six months ended June 30, 2003. The aggregate fairvalue of the securities of affiliated companies held by the Fund as of June 30, 2003 amounts to $93,173,133. Transactions during the period in which the issuers were affiliates are as follows:
Shares Gross Gross Shares Dividend Security December 31, 2002 Additions Reductions June 30, 2003 Income - -------- ----------------- --------- ---------- ------------- ------ Centerpoint Properties Trust 1,521,194 - - 1,521,194 $ 1,848,251
SEE NOTES TO FINANCIAL STATEMENTS 10 SELECTED FUNDS SCHEDULE OF INVESTMENTS SELECTED SPECIAL SHARES, INC. JUNE 30, 2003 (Unaudited)
VALUE SHARES SECURITY (NOTE 1) ======================================================================================================================= COMMON STOCK - (91.10%) BANKS AND SAVINGS & LOAN ASSOCIATIONS - (5.30%) 32,300 Bank One Corp. ..................................................................... $ 1,200,914 25,700 Golden West Financial Corp. ........................................................ 2,056,257 34,775 HSBC Holdings PLC .................................................................. 411,554 ------------- 3,668,725 ------------- BUSINESS SERVICES - (1.03%) 17,400 D&B Corp.*.......................................................................... 715,140 ------------- CHEMICALS - (3.65%) 46,700 Sigma-Aldrich Corp. ................................................................ 2,530,206 ------------- CONSUMER PRODUCTS - (2.87%) 43,700 Altria Group, Inc. ................................................................. 1,985,728 ------------- DISTRIBUTORS - (2.75%) 85,000 Aramark Corp., Class B*............................................................. 1,905,700 ------------- DIVERSIFIED - (1.32%) 20,100 Groupe Bruxelles Lambert S.A. ...................................................... 910,929 ------------- DIVERSIFIED MANUFACTURING - (2.37%) 86,400 Tyco International Ltd. ............................................................ 1,639,872 ------------- ELECTRONICS - (9.09%) 227,000 Agere Systems Inc., Class A*........................................................ 528,910 103,500 Agilent Technologies, Inc.*......................................................... 2,023,425 126,800 Applied Materials, Inc.*............................................................ 2,009,780 9,695 Molex Inc., Class A................................................................. 223,082 149,500 Taiwan Semiconductor Manufacturing Co. Ltd., ADR*................................... 1,506,960 ------------- 6,292,157 ------------- EMPLOYEE STAFFING - (0.37%) 13,560 Hudson Highland Group, Inc.*........................................................ 255,063 ------------- ENERGY - (5.64%) 80,000 Calpine Corp.*...................................................................... 528,000 23,300 EOG Resources, Inc. ................................................................ 974,872 24,000 PetroChina Co. Ltd., ADR ........................................................... 724,800 78,000 Premcor Inc.*....................................................................... 1,680,900 ------------- 3,908,572 ------------- FINANCIAL SERVICES - (5.06%) 50,000 BlackRock, Inc.*.................................................................... 2,252,000 30,000 Northern Trust Corp. ............................................................... 1,251,900 ------------- 3,503,900 ------------- FOOD/BEVERAGE & RESTAURANT - (2.95%) 9,400 Diageo PLC, ADR..................................................................... 411,344 45,000 McDonald's Corp. ................................................................... 992,700 22,900 Papa John's International, Inc.*.................................................... 640,513 ------------- 2,044,557 -------------
11 SELECTED FUNDS SCHEDULE OF INVESTMENTS SELECTED SPECIAL SHARES, INC. - CONTINUED JUNE 30, 2003 (Unaudited)
VALUE SHARES SECURITY (NOTE 1) ======================================================================================================================= COMMON STOCK - CONTINUED HOTELS & MOTELS - (1.44%) 26,000 Marriott International, Inc., Class A............................................... $ 998,920 ------------- INDUSTRIAL - (2.48%) 36,000 Sealed Air Corp.*................................................................... 1,715,760 ------------- INFORMATION/INFORMATION PROCESSING - (2.10%) 16,500 Automatic Data Processing, Inc. .................................................... 558,690 34,400 Equifax Inc. ....................................................................... 894,400 ------------- 1,453,090 ------------- INVESTMENT FIRMS - (0.18%) 500 Julius Baer Holding Ltd., Class B................................................... 122,818 ------------- LIFE INSURANCE - (0.88%) 19,900 AFLAC Inc. ......................................................................... 611,925 ------------- MEDIA - (6.45%) 49,300 Belo Corp., Class A................................................................. 1,102,348 32,300 Lagardere S.C.A. ................................................................... 1,406,244 13,300 LIN TV Corp., Class A*.............................................................. 313,215 41,200 WPP Group PLC, ADR.................................................................. 1,641,820 ------------- 4,463,627 ------------- MEDICAL INSTRUMENTS - (2.22%) 77,000 Apogent Technologies Inc.*.......................................................... 1,540,000 ------------- PROPERTY/CASUALTY INSURANCE - (3.23%) 15 Berkshire Hathaway Inc., Class A*................................................... 1,087,500 22,000 Cincinnati Financial Corp. ......................................................... 815,760 1,300 Markel Corp.*....................................................................... 332,800 ------------- 2,236,060 ------------- REINSURANCE - (4.79%) 15,400 Everest Re Group, Ltd. ............................................................. 1,178,100 30,900 Transatlantic Holdings, Inc. ....................................................... 2,136,735 ------------- 3,314,835 ------------- RETAILING - (16.45%) 207,000 AutoNation, Inc.*................................................................... 3,254,040 32,300 AutoZone, Inc.*..................................................................... 2,453,831 28,000 Costco Wholesale Corp.*............................................................. 1,024,520 42,000 Home Depot, Inc. ................................................................... 1,391,040 100,000 Tiffany & Co. ...................................................................... 3,268,000 ------------- 11,391,431 ------------- TECHNOLOGY - (6.20%) 7,700 Advent Software, Inc.*.............................................................. 130,053 53,000 BMC Software, Inc.*................................................................. 865,490 10,000 Lexmark International, Inc.*........................................................ 707,700 39,800 Microsoft Corp. .................................................................... 1,019,278
12 SELECTED FUNDS SCHEDULE OF INVESTMENTS SELECTED SPECIAL SHARES, INC. - CONTINUED JUNE 30, 2003 (Unaudited)
VALUE SHARES/PRINCIPAL SECURITY (NOTE 1) ======================================================================================================================= COMMON STOCK - CONTINUED TECHNOLOGY - CONTINUED 15,300 SAP AG, ADR......................................................................... $ 447,066 92,500 Sun Microsystems, Inc.*............................................................. 424,575 16,000 Symantec Corp.*..................................................................... 700,800 ------------- 4,294,962 ------------- TELECOMMUNICATIONS - (2.28%) 65,000 AT&T Wireless Services Inc.*........................................................ 533,650 318,000 Covad Communications Group, Inc.*................................................... 318,000 77,000 Motorola, Inc. ..................................................................... 726,110 ------------- 1,577,760 ------------- Total Common Stock - (identified cost $53,906,771)........................ 63,081,737 ------------- SHORT TERM INVESTMENTS - (7.01%) $ 1,587,000 Banc of America Securities, LLC Joint Repurchase Agreement, 1.27%, 07/01/03, dated 06/30/03, repurchase value of $1,587,056 (collateralized by: U.S. Government obligations in a pooled cash account, total market value $1,618,740).................................................. 1,587,000 2,028,000 Nomura Securities International, Inc. Joint Repurchase Agreement, 1.27%, 07/01/03, dated 06/30/03, repurchase value of $2,028,072 (collateralized by: U.S. Government obligations in a pooled cash account, total market value $2,068,560)................................................. 2,028,000 1,239,000 UBS Financial Services Inc. Joint Repurchase Agreement, 1.18%, 07/01/03, dated 06/30/03, repurchase value of $1,239,041 (collateralized by: U.S. Government obligations in a pooled cash account, total market value $1,263,780)................................................. 1,239,000 ------------- Total Short Term Investments - (identified cost $4,854,000).............. 4,854,000 ------------- Total Investments - (98.11%) - (identified cost $58,760,771) - (a)............. 67,935,737 Other Assets Less Liabilities - (1.89%)......................................... 1,308,053 ------------- Net Assets - (100%)...................................................... $ 69,243,790 =============
*Non-Income Producing Security. (a) Aggregate cost for Federal Income Tax purposes is $58,760,771. At June 30, 2003, unrealized appreciation (depreciation) of securities for Federal Income Tax purposes is as follows: Unrealized appreciation......................................................... $ 12,446,231 Unrealized depreciation......................................................... (3,271,265) ------------- Net unrealized appreciation ............................................. $ 9,174,966 =============
SEE NOTES TO FINANCIAL STATEMENTS 13 SELECTED FUNDS SCHEDULE OF INVESTMENTS SELECTED CAPITAL PRESERVATION TRUST - SELECTED U.S. GOVERNMENT INCOME FUND JUNE 30, 2003 (Unaudited)
VALUE PRINCIPAL SECURITY (NOTE 1) ======================================================================================================================= MORTGAGES - (55.62%) FANNIE MAE POOLS - (25.14%) $ 98,243 6.00%, 10/01/16, Pool No. 615235.................................................... $ 102,603 89,082 5.00%, 10/01/17, Pool No. 668039.................................................... 92,124 173,574 5.00%, 10/01/17, Pool No. 661813.................................................... 179,501 200,000 4.50%, 06/01/18, Pool No. 722795.................................................... 204,388 83,051 6.50%, 05/01/31, Pool No. 578867.................................................... 86,619 144,094 6.50%, 06/01/31, Pool No. 589340.................................................... 150,285 169,148 7.50%, 03/01/32, Pool No. 545546.................................................... 179,798 104,580 6.00%, 10/01/32, Pool No. 667338.................................................... 108,743 240,076 6.00%, 11/01/32, Pool No. 545998.................................................... 249,634 ------------- Total FANNIE MAE - (identified cost $1,337,251).............................. 1,353,695 ------------- FREDDIE MAC POOLS - (20.24%) 118,517 6.00%, 10/01/16, Pool No. E01054.................................................... 123,294 223,376 6.00%, 11/01/16, Pool No. E86208.................................................... 232,380 140,253 5.00%, 10/01/17, Pool No. E91955.................................................... 144,954 167,533 7.00%, 06/01/32, Pool No. C68162.................................................... 175,749 149,599 6.50%, 07/01/32, Pool No. C68657.................................................... 155,652 100,859 6.50%, 08/01/32, Pool No. C69739.................................................... 104,940 148,144 5.50%, 02/01/33, Pool No. C77918.................................................... 153,129 ------------- Total FREDDIE MAC - (identified cost $1,086,114)............................. 1,090,098 ------------- GINNIE MAE POOLS - (10.24%) 2,545 5.75%, 09/20/23, Pool No. 008299 (b)................................................ 2,630 4,282 4.375%, 01/20/24, Pool No. 008360 (b).............................................. 4,447 142,174 5.50%, 11/15/32, Pool No. 589533.................................................... 148,424 228,318 6.00%, 02/15/33, Pool No. 607650.................................................... 239,296 149,548 6.00%, 03/15/33, Pool No. 553126.................................................... 156,738 ------------- Total GINNIE MAE - (identified cost $548,960)................................ 551,535 ------------- Total Mortgages - (identified cost $2,972,325)............................... 2,995,328 ------------- U.S. TREASURY BONDS - (11.67%) 160,000 Interest-Only Strip, 4.42%, 11/15/12 (c)............................................ 112,499 165,000 Principal-Only Strip, 4.18%, 05/15/17 (c)........................................... 89,202 300,000 Principal-Only Strip, 4.43%, 08/15/19 (c)........................................... 140,532 50,000 Principal-Only Strip, 5.40%, 11/15/27 (c)........................................... 14,789 100,000 7.50%, 11/15/16..................................................................... 135,891 15,000 6.00%, 02/15/26..................................................................... 17,944 90,000 6.75%, 08/15/26..................................................................... 117,365 ------------- Total U.S. Treasury Bonds - (identified cost $623,249)....................... 628,222 -------------
14 SELECTED FUNDS SCHEDULE OF INVESTMENTS SELECTED CAPITAL PRESERVATION TRUST - SELECTED U.S. GOVERNMENT INCOME FUND - CONTINUED JUNE 30, 2003 (Unaudited)
VALUE PRINCIPAL SECURITY (NOTE 1) ======================================================================================================================= U.S. TREASURY NOTES - (14.18%) $ 200,000 6.875%, 05/15/06.................................................................... $ 229,282 160,000 7.00%, 07/15/06..................................................................... 184,899 80,000 6.50%, 10/15/06..................................................................... 91,925 150,000 4.75%, 11/15/08..................................................................... 166,313 75,000 6.50%, 02/15/10..................................................................... 91,055 ------------- Total U.S. Treasury Notes - (identified cost $752,075)....................... 763,474 ------------- GOVERNMENT AGENCY NOTES - (11.73%) 160,000 Fannie Mae, 4.375%, 10/15/06........................................................ 172,141 150,000 Fannie Mae, 5.00%, 01/20/07......................................................... 152,818 100,000 Fannie Mae, 6.375%, 06/15/09........................................................ 118,116 50,000 Freddie Mac, 3.15%, 09/02/05........................................................ 50,158 135,000 Freddie Mac, 4.375%, 02/04/10....................................................... 138,402 ------------- Total Government Agency Notes - (identified cost $632,192)................... 631,635 ------------- SHORT TERM INVESTMENTS - (7.33%) 129,000 Banc of America Securities, LLC Joint Repurchase Agreement, 1.27%, 07/01/03, dated 06/30/03, repurchase value of $129,005 (collateralized by: U.S. Government obligations in a pooled cash account, total market value $131,580).................................................... 129,000 165,000 Nomura Securities International, Inc. Joint Repurchase Agreement, 1.27%, 07/01/03, dated 06/30/03, repurchase value of $165,006 (collateralized by: U.S. Government obligations in a pooled cash account, total market value $168,300)................................................... 165,000 101,000 UBS Financial Services Inc. Joint Repurchase Agreement, 1.18%, 07/01/03, dated 06/30/03, repurchase value of $101,003 (collateralized by: U.S. Government obligations in a pooled cash account, total market value $103,020)................................................... 101,000 ------------- Total Short Term Investments - (identified cost $395,000).................. 395,000 ------------- Total Investments - (100.53%) - (identified cost $5,374,841) - (a).............. 5,413,659 Liabilities Less Other Assets - (0.53%)......................................... (28,712) ------------- Net Assets - (100%)........................................................ $ 5,384,947 ============= (a) Aggregate cost for Federal Income Tax purposes is $5,374,841. At June 30, 2003, unrealized appreciation (depreciation) of securities for Federal Income Tax purposes is as follows: Unrealized appreciation......................................................... $ 56,728 Unrealized depreciation......................................................... (17,910) ------------- Net unrealized appreciation................................................ $ 38,818 ============= (b) The interest rates on adjustable rate mortgage securities, shown as of June 30, 2003, may change monthly or less frequently and are based on indices of market interest rates. (c) Zero coupon bonds reflect effective yield on the date of purchase.
SEE NOTES TO FINANCIAL STATEMENTS 15 SELECTED FUNDS SCHEDULE OF INVESTMENTS SELECTED CAPITAL PRESERVATION TRUST - SELECTED DAILY GOVERNMENT FUND JUNE 30, 2003 (Unaudited)
VALUE PRINCIPAL (NOTE 1) ======================================================================================================================= FANNIE MAE - (22.42%) $ 1,340,000 1.18%, 07/01/03..................................................................... $ 1,340,000 2,000,000 1.18%, 07/07/03..................................................................... 1,999,607 600,000 1.20%, 07/09/03..................................................................... 599,840 4,486,000 1.18%, 07/23/03..................................................................... 4,482,760 2,000,000 4.00%, 08/15/03..................................................................... 2,006,082 1,800,000 1.08%, 08/25/03..................................................................... 1,797,030 1,400,000 1.075%, 09/03/03.................................................................... 1,397,324 16,000 1.22%, 09/09/03..................................................................... 15,962 5,000,000 0.87%, 09/24/03..................................................................... 4,989,729 35,000 5.50%, 09/29/03..................................................................... 35,338 70,000 5.26%, 10/02/03..................................................................... 70,643 25,000 6.84%, 10/15/03..................................................................... 25,345 25,000 4.75%, 11/14/03..................................................................... 25,295 35,000 5.80%, 12/10/03..................................................................... 35,609 10,000 5.41%, 12/15/03..................................................................... 10,140 7,000,000 1.053%, 03/11/04 (b)................................................................ 7,000,268 75,000 5.91%, 03/19/04..................................................................... 77,531 -------------- Total FANNIE MAE - (identified cost $25,908,503) ................................. 25,908,503 -------------- FEDERAL FARM CREDIT BANK - (8.97%) 74,000 1.34%, 08/05/03..................................................................... 73,904 55,000 5.375%, 09/11/03.................................................................... 55,440 125,000 3.125%, 10/01/03.................................................................... 125,587 5,000,000 1.19%, 10/03/03 (b)................................................................. 4,999,549 100,000 4.82%, 10/07/03..................................................................... 100,913 5,000,000 1.126%, 11/12/03 (b)................................................................ 4,999,816 15,000 5.10%, 11/24/03..................................................................... 15,152 -------------- Total Federal Farm Credit Bank - (identified cost $10,370,361).................... 10,370,361 -------------- FEDERAL HOME LOAN BANK - (20.53%) 7,400,000 4.50%, 07/07/03..................................................................... 7,403,892 1,250,000 1.20%, 07/09/03..................................................................... 1,249,667 45,000 5.715%, 07/09/03.................................................................... 45,044 2,000,000 1.14%, 07/30/03..................................................................... 1,998,163 2,000,000 1.14%, 08/06/03..................................................................... 1,997,720 100,000 5.36%, 08/11/03..................................................................... 100,445 400,000 4.125%, 08/15/03.................................................................... 401,385 1,525,000 6.875%, 08/15/03.................................................................... 1,535,673 200,000 5.705%, 08/28/03.................................................................... 201,394
16 SELECTED FUNDS SCHEDULE OF INVESTMENTS SELECTED CAPITAL PRESERVATION TRUST - SELECTED DAILY GOVERNMENT FUND - CONTINUED JUNE 30, 2003 (Unaudited)
VALUE PRINCIPAL (NOTE 1) ======================================================================================================================= FEDERAL HOME LOAN BANK - CONTINUED $ 400,000 5.63%, 09/02/03..................................................................... $ 402,574 190,000 1.22%, 09/04/03..................................................................... 189,581 1,815,000 5.125%, 09/15/03.................................................................... 1,827,560 30,000 5.005%, 10/01/03.................................................................... 30,253 25,000 6.00%, 10/07/03..................................................................... 25,310 75,000 5.00%, 10/16/03..................................................................... 75,782 35,000 5.08%, 10/20/03..................................................................... 35,407 25,000 5.04%, 10/27/03..................................................................... 25,240 20,000 5.375%, 10/27/03.................................................................... 20,266 35,000 5.125%, 11/20/03.................................................................... 35,421 20,000 5.125%, 12/01/03.................................................................... 20,241 15,000 3.02%, 12/10/03..................................................................... 15,065 25,000 5.06%, 01/05/04..................................................................... 25,461 25,000 5.195%, 01/29/04.................................................................... 25,540 85,000 5.25%, 01/29/04..................................................................... 86,916 25,000 6.00%, 02/04/04..................................................................... 25,671 5,800,000 1.36%, 03/05/04..................................................................... 5,801,084 70,000 5.485%, 03/23/04.................................................................... 72,185 50,000 6.05%, 03/26/04..................................................................... 51,784 -------------- Total Federal Home Loan Bank - (identified cost $23,724,724)...................... 23,724,724 -------------- FREDDIE MAC - (3.46%) 2,100,000 5.75%, 07/15/03..................................................................... 2,103,697 1,549,000 1.07%, 09/11/03..................................................................... 1,545,684 125,000 1.22%, 09/17/03..................................................................... 124,670 180,000 6.375%, 11/15/03.................................................................... 183,357 25,000 3.50%, 02/20/04..................................................................... 25,327 10,000 6.313%, 02/26/04.................................................................... 10,282 -------------- Total FREDDIE MAC - (identified cost $3,993,017).................................. 3,993,017 -------------- SALLIE MAE - (6.32%) 750,000 1.18%, 08/15/03 (b)................................................................. 750,269 6,550,000 0.89%, 08/21/03 (b)................................................................. 6,549,978 -------------- Total SALLIE MAE - (identified cost $7,300,247)................................... 7,300,247 --------------
17 SELECTED FUNDS SCHEDULE OF INVESTMENTS SELECTED CAPITAL PRESERVATION TRUST - SELECTED DAILY GOVERNMENT FUND - CONTINUED JUNE 30, 2003 (Unaudited)
VALUE PRINCIPAL (NOTE 1) ======================================================================================================================= REPURCHASE AGREEMENTS - (38.04%) $ 14,374,000 Banc of America Securities, LLC Joint Repurchase Agreement, 1.27%, 07/01/03, dated 06/30/03, repurchase value of $14,374,507 (collateralized by: U.S. Government obligations in a pooled cash account, total market value $14,661,480)................................................. $ 14,374,000 18,366,000 Nomura Securities International, Inc. Joint Repurchase Agreement, 1.27%, 07/01/03, dated 06/30/03, repurchase value of $18,366,648 (collateralized by: U.S. Government obligations in a pooled cash account, total market value $18,733,320)................................................ 18,366,000 11,224,000 UBS Financial Services Inc. Joint Repurchase Agreement, 1.18%, 07/01/03, dated 06/30/03, repurchase value of $11,224,368 (collateralized by: U.S. Government obligations in a pooled cash account, total market value $11,448,480)................................................ 11,224,000 -------------- Total Repurchase Agreements - (identified cost $43,964,000)............... 43,964,000 -------------- Total Investments - (99.74%) - (identified cost $115,260,852) - (a)............ 115,260,852 Other Assets Less Liabilities - (0.26%)........................................ 298,252 -------------- Net Assets - (100%)........................................................ $ 115,559,104 ============== (a) Aggregate cost for Federal Income Tax purposes is $115,260,852. (b) The interest rates on floating rate securities, shown as of June 30, 2003, may change daily or less frequently and are based on indices of market rates. For purposes of amortized cost valuation, the maturity dates of these securities are considered to be the effective maturities, based on the reset dates of the securities' variable rates.
SEE NOTES TO FINANCIAL STATEMENTS 18 SELECTED FUNDS STATEMENTS OF ASSETS AND LIABILITIES At June 30, 2003 (Unaudited)
=========================================================================================================================== U.S. SELECTED SELECTED GOVERNMENT DAILY AMERICAN SPECIAL INCOME GOVERNMENT SHARES SHARES FUND FUND --------------- -------------- -------------- -------------- ASSETS: Investments in securities, at value * (see accompanying Schedules of Investments) Unaffiliated companies...................... $ 4,801,149,539 $ 67,935,737 $ 5,413,659 $ 115,260,852 Affiliated companies........................ 93,173,133 - - - Cash.......................................... 342,636 2,619 2,438 3,753 Receivables: Dividends and interest...................... 6,528,238 74,212 36,615 423,516 Capital stock sold.......................... 6,284,843 23,079 485 13,284 Investment securities sold.................. - 1,712,133 - - Due from adviser............................ - - 1,494 - Prepaid expenses............................. 52,115 6,373 2,140 6,551 --------------- -------------- -------------- -------------- Total assets............................ 4,907,530,504 69,754,153 5,456,831 115,707,956 --------------- -------------- -------------- -------------- LIABILITIES: Payables: Capital stock reacquired.................... 5,764,000 7,998 56,266 32,718 Investment securities purchased............. - 401,269 - - Accrued expenses.............................. 5,240,728 101,096 9,706 81,193 Distributions payable......................... - - 5,912 34,941 --------------- -------------- -------------- -------------- Total liabilities....................... 11,004,728 510,363 71,884 148,852 --------------- -------------- -------------- -------------- NET ASSETS ...................................... $ 4,896,525,776 $ 69,243,790 $ 5,384,947 $ 115,559,104 =============== ============== ============== ============== SHARES OUTSTANDING (NOTE 5)...................... 171,999,097 6,891,828 593,023 115,559,104 =============== ============== ============== ============== NET ASSET VALUE, offering and redemption price per share (Net Assets (divided by) Shares Outstanding)..... $ 28.47 $ 10.05 $ 9.08 $ 1.00 =========== ========== ========== ========== NET ASSETS CONSIST OF: Par value of shares of capital stock.......... $ 214,998,871 $ 1,722,957 $ 59,302 $ 11,555,910 Additional paid-in capital.................... 4,400,607,863 58,665,199 5,249,421 104,003,194 Undistributed net investment income (loss).... 14,878,161 (134,091) (146) - Accumulated net realized gains (losses) from investments and foreign currency transactions............................... (482,722,906) (185,689) 37,552 - Net unrealized appreciation on investments and foreign currency transactions............ 748,763,787 9,175,414 38,818 - --------------- -------------- -------------- -------------- $ 4,896,525,776 $ 69,243,790 $ 5,384,947 $ 115,559,104 =============== ============== ============== ==============
* Including repurchase agreements of $189,910,000, $4,854,000, $395,000 and $43,964,000 for Selected American Shares, Selected Special Shares, Selected U.S. Government Income Fund and Selected Daily Government Fund, respectively, and cost of $58,760,771, $5,374,841 and $115,260,852 for Selected Special Shares, Selected U.S. Government Income Fund and Selected Daily Government Fund, respectively. For Selected American Shares, the cost for Unaffiliated and Affiliated companies is $4,113,886,541 and $31,709,425, respectively. SEE NOTES TO FINANCIAL STATEMENTS 19 SELECTED FUNDS STATEMENTS OF OPERATIONS For the six months ended June 30, 2003 (Unaudited)
=========================================================================================================================== U.S. SELECTED SELECTED GOVERNMENT DAILY AMERICAN SPECIAL INCOME GOVERNMENT SHARES SHARES FUND FUND --------------- --------------- --------------- ------------ INVESTMENT INCOME (LOSS): Income: Dividends Unaffiliated companies*...................... $ 35,650,462 $ 246,463 $ - $ - Affiliated companies......................... 1,848,251 - - - Interest....................................... 2,297,536 13,696 124,703 769,371 Security lending fees.......................... 20,518 - - - --------------- --------------- --------------- ------------ Total income............................... 39,816,767 260,159 124,703 769,371 --------------- --------------- --------------- ------------ Expenses: Management fees (Note 2)....................... 12,349,340 210,187 8,243 172,970 Custodian fees................................. 378,838 10,995 6,999 10,720 Transfer agent fees............................ 1,864,856 50,112 7,472 27,320 Audit fees..................................... 22,800 7,200 3,600 6,000 Legal fees..................................... 38,485 2,544 101 2,148 Reports to shareholders........................ 308,220 4,009 1,009 5,612 Directors' fees and expenses................... 274,156 4,304 267 5,696 Registration and filing fees................... 29,245 10,191 6,004 9,672 Miscellaneous.................................. 11,062 4,224 4,813 2,060 Payments under distribution plan (Note 3)...... 5,485,990 75,551 6,870 144,142 --------------- --------------- --------------- ------------ Total expenses............................. 20,762,992 379,317 45,378 386,340 Expenses paid indirectly (Note 6).......... (36,831) (7) (49) (6) Reimbursement/waiver of expenses by adviser (Note 2)......................... - - (9,620) - --------------- --------------- --------------- ------------ Net expenses............................... 20,726,161 379,310 35,709 386,334 --------------- --------------- --------------- ------------ Net investment income (loss)............... 19,090,606 (119,151) 88,994 383,037 --------------- --------------- --------------- ------------ REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain (loss) from: Investment transactions...................... (104,870,811) 1,375,459 45,235 - Foreign currency transactions................ 7,386 (694) - - Net increase (decrease) in unrealized appreciation of investments during the period............................ 587,706,055 8,536,718 (43,899) - --------------- --------------- --------------- ------------ Net realized and unrealized gain on investments and foreign currency............. 482,842,630 9,911,483 1,336 - --------------- --------------- --------------- ------------ Net increase in net assets resulting from operations............................ $ 501,933,236 $ 9,792,332 $ 90,330 $ 383,037 =============== =============== =============== ============ * Net of foreign taxes withheld as follows..... $ 723,144 $ 11,270 - -
SEE NOTES TO FINANCIAL STATEMENTS 20 SELECTED FUNDS STATEMENTS OF CHANGES IN NET ASSETS For the six months ended June 30, 2003 (Unaudited)
======================================================================================================================== U.S. SELECTED SELECTED GOVERNMENT DAILY AMERICAN SPECIAL INCOME GOVERNMENT SHARES SHARES FUND FUND ---------------- --------------- ---------------- --------------- OPERATIONS: Net investment income (loss)................ $ 19,090,606 $ (119,151) $ 88,994 $ 383,037 Net realized gain (loss) from investments and foreign currency transactions.............................. (104,863,425) 1,374,765 45,235 - Net increase (decrease) in unrealized appreciation of investments............... 587,706,055 8,536,718 (43,899) - ---------------- --------------- ---------------- --------------- Net increase in net assets resulting from operations.......... 501,933,236 9,792,332 90,330 383,037 DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income....................... - - (88,994) (383,037) CAPITAL SHARE TRANSACTIONS (NOTE 5).................................... 48,947,156 (310,520) 37,940 (627,396) ---------------- --------------- ---------------- --------------- Total increase (decrease) in net assets......... 550,880,392 9,481,812 39,276 (627,396) NET ASSETS: Beginning of period......................... 4,345,645,384 59,761,978 5,345,671 116,186,500 ---------------- --------------- ---------------- --------------- End of period (including undistributed net investment income (loss) of $14,878,161, $(134,091) and $(146) for Selected American Shares, Selected Special Shares and Selected U.S. Government Income Fund, respectively)....................... $ 4,896,525,776 $ 69,243,790 $ 5,384,947 $ 115,559,104 ================ =============== ================ ===============
SEE NOTES TO FINANCIAL STATEMENTS 21 SELECTED FUNDS STATEMENTS OF CHANGES IN NET ASSETS For the year ended December 31, 2002
======================================================================================================================= U.S. SELECTED SELECTED GOVERNMENT DAILY AMERICAN SPECIAL INCOME GOVERNMENT SHARES SHARES FUND FUND ---------------- --------------- ---------------- --------------- OPERATIONS: Net investment income (loss).............. $ 29,532,405 $ (309,343) $ 168,632 $ 1,476,610 Net realized gain (loss) from investments and foreign currency transactions............................ (308,403,528) (1,567,663) 129,053 - Net increase (decrease) in unrealized appreciation of investments............. (658,252,830) (11,458,544) 15,448 - ---------------- --------------- ---------------- --------------- Net increase (decrease) in net assets resulting from operations........ (937,123,953) (13,335,550) 313,133 1,476,610 DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income..................... (32,858,762) - (168,632) (1,476,610) Realized gains from investment transactions ........................... - (301,935) (49,411) - Return of capital......................... (1,389,403) - - - CAPITAL SHARE TRANSACTIONS (NOTE 5).................................. (247,964,073) 307,866 1,273,794 3,806,489 ---------------- --------------- ---------------- --------------- Total increase (decrease) in net assets....... (1,219,336,191) (13,329,619) 1,368,884 3,806,489 NET ASSETS: Beginning of year......................... 5,564,981,575 73,091,597 3,976,787 112,380,011 ---------------- --------------- ---------------- --------------- End of year (including overdistributed net investment income of $4,212,445, $14,940 and $146 for Selected American Shares, Selected Special Shares and Selected U.S. Government Income Fund, respectively).............. $ 4,345,645,384 $ 59,761,978 $ 5,345,671 $ 116,186,500 ================ =============== ================ ===============
SEE NOTES TO FINANCIAL STATEMENTS 22 SELECTED FUNDS NOTES TO FINANCIAL STATEMENTS June 30, 2003 (Unaudited) ================================================================================ NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Selected Funds (the Funds) consist of Selected American Shares, Inc., (American Shares, Inc.), Selected Special Shares, Inc., (Special Shares, Inc.) and the Selected Capital Preservation Trust (the Trust). The Trust operates as a series fund, consisting of the U.S. Government Income Fund and Daily Government Fund. The Funds and Trust are registered under the Investment Company Act of 1940, as amended, as diversified, open-end management investment companies. The Trust accounts separately for the assets, liabilities and operations of each series. The following is a summary of significant accounting policies followed by the Funds in the preparation of financial statements. American Shares, Inc. and Special Shares, Inc. are diversified, professionally managed stock-oriented funds. Selected U.S. Government Income Fund (U.S. Government Income) seeks to obtain current income consistent with preservation of capital by investing primarily in debt obligations of the U.S. Government, its agencies or instrumentalities. Selected Daily Government Fund (Daily Government) seeks to provide a high level of current income from short-term money market securities consistent with prudent investment management, preservation of capital and maintenance of liquidity. It invests in U.S. Government Securities and repurchase agreements in respect thereto. An investment in any of the Funds, as with any mutual fund, includes risks that vary depending upon the fund's investment objectives and policies. There is no assurance that the investment objective of any fund will be achieved. A fund's return and net asset value will fluctuate, although Daily Government seeks to maintain a net asset value of $1.00 per share. A. VALUATION OF SECURITIES - Securities listed on national securities exchanges are valued at the last reported sales price on the day of valuation. Securities traded in the over the counter market and listed securities for which no sale was reported on that date are stated at the last quoted bid price. Securities for which market quotations are not readily available are valued at fair value as determined in good faith by the Board of Directors/Trustees. Daily Government uses the amortized cost method of valuing investment securities, which represents fair value. These valuation procedures are reviewed and subject to approval by the Board of Directors/Trustees. B. MASTER REPURCHASE AGREEMENTS - The Funds, along with other affiliated funds, may transfer uninvested cash balances into one or more master repurchase agreement accounts. These balances are invested in one or more repurchase agreements, secured by U.S. government securities. Securities pledged as collateral for repurchase agreements are held by a custodian bank until the agreements mature. Each agreement requires that the market value of the collateral be sufficient to cover payments of interest and principal; however, in the event of default by the other party to the agreement, retention of the collateral may be subject to legal proceedings. C. CURRENCY TRANSLATION - The market values of all assets and liabilities denominated in foreign currencies are recorded in the financial statements after translation to the U.S. dollar based upon the mean between the bid and offered quotations of the currencies against U.S. dollars on the date of valuation. The cost basis of such assets and liabilities is determined based upon historical exchange rates. Income and expenses are translated at average exchange rates in effect as accrued or incurred. 23 SELECTED FUNDS NOTES TO FINANCIAL STATEMENTS - (Continued) June 30, 2003 (Unaudited) ================================================================================ NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Continued) D. FOREIGN CURRENCY - The Funds may enter into forward purchases or sales of foreign currencies to hedge certain foreign currency denominated assets and liabilities against declines in market value relative to the U.S. dollar. Forward currency contracts are marked-to-market daily and the change in market value is recorded by the Funds as an unrealized gain or loss. When the forward currency contract is closed, the Funds record a realized gain or loss equal to the difference between the value of the forward currency contract at the time it was opened and value at the time it was closed. Investments in forward currency contracts may expose the Funds to risks resulting from unanticipated movements in foreign currency exchange rates or failure of the counter-party to the agreement to perform in accordance with the terms of the contract. Reported net realized foreign exchange gains or losses arise from the sales and maturities of investments, sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the Funds' books, and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the value of assets and liabilities other than investments in securities at fiscal year end, resulting from changes in the exchange rate. The Funds include foreign currency gains and losses realized on the sale of investments together with market gains and losses on such investments in the statement of operations. E. FEDERAL INCOME TAXES - It is each Fund's policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its taxable income, including any net realized gains on investments not offset by loss carryovers, to shareholders. Therefore, no provision for federal income or excise tax is required. At June 30, 2003, American Shares, Inc., Special Shares, Inc. and U.S. Government Income had post October 2002 losses of approximately $4,593,000, $1,130,000 and $7,682, respectively, available to offset future capital gains if any, which expire in 2011. At June 30, 2003, each Fund had available for federal income tax purposes unused capital loss carryforwards as follows:
AMERICAN SPECIAL U.S. GOVERNMENT SHARES, INC. SHARES, INC. INCOME ------------ ------------ ---------------- EXPIRING -------- 12/31/2009 $ 67,867,000 $ - $ - 12/31/2010 296,227,000 430,000 - --------------- ------------- ---------- TOTAL $ 364,094,000 $ 430,000 $ -
F. USE OF ESTIMATES IN FINANCIAL STATEMENTS - In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of income and expenses during the reporting period. Actual results may differ from these estimates. G. SECURITIES TRANSACTIONS AND RELATED INVESTMENT INCOME - Securities transactions are accounted for on the trade date (date the order to buy or sell is executed) with realized gain or loss on the sale of securities being determined based upon identified cost. Dividend income is recorded on the ex-dividend date. Interest income, which includes accretion of discount and amortization of premium, is accrued as earned. 24 SELECTED FUNDS NOTES TO FINANCIAL STATEMENTS - (Continued) June 30, 2003 (Unaudited) ================================================================================ NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Continued) H. DIRECTORS/TRUSTEES FEES AND EXPENSES - The Funds have adopted a non-funded deferred compensation plan for independent Directors/Trustees that enables Directors/Trustees to elect to defer receipt of all or a portion of annual fees they are entitled to receive. The value of an eligible Director's/Trustee's deferral account is based upon years of service and fees paid to each Director/Trustee during the years of service. Under the plan, the compensation deferred is periodically adjusted as though an equivalent amount had been invested for the Director/Trustee in shares of one or more Selected Funds selected by the Director/Trustee. The amount paid to the Director/Trustee under the plan will be determined based upon the performance of the Selected Funds. Deferral of Director/Trustees' fees under the plan will not affect the net assets of the Funds, and will not materially affect the Fund's assets, liabilities, or net income per share. During the six months ended June 30, 2003, for American Shares, Inc., Special Shares, Inc., U.S. Government Income and Daily Government credits of $182,329, $2,839, $40 and $789, respectively were made for these obligations, resulting in an accumulated liability of $839,731, $16,270, $425 and $7,890, respectively. I. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS - Dividends and distributions to shareholders are recorded on the ex-dividend date. Net investment income (loss), net realized gains (losses) and net unrealized appreciation (depreciation) of investments may differ for financial statement and tax purposes primarily because of the recognition of certain foreign currency gains (losses) as ordinary income (loss) for tax purposes and the tax deferral of losses on "wash sale" transactions. The character of dividends and distributions made during the fiscal year from net investment income and net realized securities gains may differ from their ultimate characterization for federal income tax purposes. Also, due to the timing of dividends and distributions, the fiscal year in which amounts are distributed may differ from the fiscal year in which income or realized gain was recorded by the Funds. The Funds adjust the classification of distributions to shareholders to reflect the differences between financial statement amounts and distributions determined in accordance with income tax regulations. NOTE 2 - INVESTMENT ADVISORY FEES Advisory fees are paid monthly to Davis Selected Advisers, L.P. (the "Adviser"), the Fund's investment adviser. The rate for American Shares, Inc. is 0.65% on the first $500 million of average net assets, 0.60% of the average net assets on the next $500 million, 0.55% of the average net assets on the next $2 billion, 0.54% of the average net assets on the next $1 billion, 0.53% of the average net assets on the next $1 billion, 0.52% of the average net assets on the next $1 billion, 0.51% of the average net assets on the next $1 billion and 0.50% of the average net assets in excess of $7 billion. The rate for Special Shares, Inc. is 0.70% on the first $50 million of average net assets, 0.675% on the next $100 million, 0.65% on the next $100 million and 0.60% of average net assets in excess of $250 million. Advisory fees paid during the six months ended June 30, 2003, approximated 0.56% and 0.70% of average net assets for American Shares, Inc. and Special Shares, Inc., respectively. The rate for both U.S. Government Income and Daily Government is 0.30% of average net assets. State Street Bank and Trust Company ("State Street Bank") is the Funds' primary transfer agent. The Adviser is also paid for certain transfer agent services. The fee paid to the Adviser for the six months ended June 30, 2003 was $85,635, $5,356, $488 and $1,982 for American Shares, Inc., Special Shares, Inc., U.S. Government Income and Daily Government, respectively. Certain Directors/Trustees and officers of the Funds are also Directors/Trustees and officers of the general partner of the Adviser. 25 SELECTED FUNDS NOTES TO FINANCIAL STATEMENTS - (Continued) June 30, 2003 (Unaudited) ================================================================================ NOTE 2 - INVESTMENT ADVISORY FEES - (Continued) The Adviser has voluntarily agreed to waive certain expenses incurred in the current fiscal year which exceed 1.30% of average net assets for U.S. Government Income. During the six months ended June 30, 2003, the Adviser voluntarily agreed to waive $9,620 in expenses for U.S. Government Income. This undertaking may be amended or withdrawn at any time. Davis Selected Advisers - NY, Inc. ("DSA-NY"), a wholly-owned subsidiary of the Adviser, acts as sub-adviser to the Funds. The Funds pay no fees directly to DSA-NY. NOTE 3 - DISTRIBUTION For services under the distribution agreement, the Funds pay a fee of 0.25% of average daily net assets. For the six months ended June 30, 2003, American Shares, Inc., Special Shares, Inc., U.S. Government Income and Daily Government incurred distribution services fees totaling $5,485,990, $75,551, $6,870 and $144,142, respectively. NOTE 4 - PURCHASES AND SALES OF SECURITIES Purchases and sales of investment securities (excluding short-term securities) during the six months ended June 30, 2003 were as follows: AMERICAN SPECIAL U.S. GOVERNMENT SHARES, INC. SHARES, INC. INCOME ---------------- --------------- --------------- Cost of purchases..... $ 267,180,849 $ 15,830,579 $ 5,080,759 Proceeds of sales..... $ 151,015,097 $ 19,919,032 $ 3,516,404 NOTE 5 - CAPITAL STOCK At June 30, 2003, there were 300 million shares of capital stock of American Shares, Inc. ($1.25 par value per share) authorized. At June 30, 2003, there were 50 million shares of capital stock of Special Shares, Inc. ($0.25 par value per share) authorized. At June 30, 2003, there were unlimited shares of capital stock of Selected Capital Preservation Trust ($0.10 par value per share) authorized. Transactions in capital stock were as follows:
SIX MONTHS ENDED JUNE 30, 2003 (UNAUDITED) ------------------------------------------------------------------------- AMERICAN SPECIAL U.S. SHARES SHARES GOVERNMENT DAILY INC. INC. INCOME GOVERNMENT ------------- ------------- ------------- ------------- Shares sold .................................. 16,659,929 549,614 97,154 6,599,328 Shares issued in reinvestment of distributions - - 9,058 397,726 ------------- ------------- ------------- ------------- 16,659,929 549,614 106,212 6,997,054 Shares redeemed .............................. (15,022,143) (598,156) (102,301) (7,624,450) ------------- ------------- ------------- ------------- Net increase (decrease) ................ 1,637,786 (48,542) 3,911 (627,396) ============= ============= ============= ============= Proceeds from shares sold .................... $ 433,715,336 $ 4,848,448 $ 884,029 $ 6,599,328 Proceeds from shares issued in reinvestment of distributions ............ - - 82,134 397,726 ------------- ------------- ------------- ------------- 433,715,336 4,848,448 966,163 6,997,054 Cost of shares redeemed ...................... (384,768,180) (5,158,968) (928,223) (7,624,450) ------------- ------------- ------------- ------------- Net increase (decrease) ................ $ 48,947,156 $ (310,520) $ 37,940 $ (627,396) ============= ============= ============= =============
26 SELECTED FUNDS NOTES TO FINANCIAL STATEMENTS - (Continued) June 30, 2003 (Unaudited) ================================================================================ NOTE 5 - CAPITAL STOCK - (Continued)
YEAR ENDED DECEMBER 31, 2002 ------------------------------------------------------------------------- AMERICAN SPECIAL U.S. SHARES SHARES GOVERNMENT DAILY INC. INC. INCOME GOVERNMENT --------------- ------------- ------------ ------------ Shares sold .................................. 37,405,530 2,426,855 375,506 14,742,743 Shares issued in reinvestment of distributions 1,234,100 30,503 21,723 1,507,431 --------------- ------------- ------------ ------------ 38,639,630 2,457,358 397,229 16,250,174 Shares redeemed .............................. (47,855,930) (2,481,408) (256,805) (12,443,685) --------------- ------------- ------------ ------------ Net increase (decrease) ................ (9,216,300) (24,050) 140,424 3,806,489 =============== ============= ============ ============ Proceeds from shares sold .................... $ 1,036,812,994 $ 23,340,084 $ 3,375,643 $ 14,742,743 Proceeds from shares issued in reinvestment of distributions ............ 32,656,579 280,018 195,087 1,507,431 --------------- ------------- ------------ ------------ 1,069,469,573 23,620,102 3,570,730 16,250,174 Cost of shares redeemed ...................... (1,317,433,646) (23,312,236) (2,296,936) (12,443,685) --------------- ------------- ------------ ------------ Net increase (decrease) ................ $ (247,964,073) $ 307,866 $ 1,273,794 $ 3,806,489 =============== ============= ============ ============
NOTE 6 - EXPENSES PAID INDIRECTLY Under an agreement with the custodian bank, each Fund's custodian fees are reduced for earnings on cash balances maintained at the custodian by the Funds. During the six months ended June 30, 2003, such reductions amounted to $160, $7, $49 and $6 for American Shares, Inc., Special Shares, Inc., U.S. Government Income and Daily Government, respectively. American Shares, Inc. has entered into agreements with certain brokers whereby the Fund's operating expenses are reduced by a portion of the commissions paid to such brokers. Portfolio transactions are allocated to these brokers only when the Fund's traders make a good faith determination that such brokers can achieve best execution, not withstanding the operating expense reductions. During the six months ended June 30, 2003 the reduction amounted to $36,671. NOTE 7 - SECURITIES LOANED American Shares, Inc. (the "Fund") has entered into a securities lending arrangement with UBS Financial Services Inc. Under the terms of the agreement, the Fund receives fee income from lending transactions; in exchange for such fees, UBS Financial Services Inc. is authorized to loan securities on behalf of the Fund, against receipt of collateral at least equal to the value of the securities loaned. Cash collateral is invested by the Adviser in money market instruments. As of June 30, 2003, the Fund did not have any loaned securities. The Fund bears the risk of any deficiency in the amount of the collateral available for return to a borrower due to a loss in an approved investment. 27 SELECTED FUNDS FINANCIAL HIGHLIGHTS SELECTED AMERICAN SHARES, INC. ================================================================================ The following financial information represents selected data for each share of capital stock outstanding throughout each period:
SIX MONTHS ENDED YEAR ENDED DECEMBER 31, JUNE 30, 2003 ------------------------------------------------------------------ (UNAUDITED) 2002 2001 2000 1999 1998 ----------- ---- ---- ---- ---- ---- Net Asset Value, Beginning of Period.... $ 25.51 $ 30.99 $ 35.33 $ 35.80 $ 31.16 $ 27.18 ---------- ---------- ---------- ---------- ---------- ---------- Income (Loss) From Investment Operations Net Investment Income.................. .11 .17 .14 .15 .15 .15 Net Realized and Unrealized Gains (Losses)...................... 2.85 (5.45) (4.10) 2.98 6.08 4.24 ---------- ---------- ---------- ---------- ---------- ---------- Total From Investment Operations.... 2.96 (5.28) (3.96) 3.13 6.23 4.39 Dividends and Distributions Dividends from Net Investment Income... - (.17) (.14) (.14) (.15) (.15) Distributions from Realized Gains...... - - (.24) (3.46) (1.44) (.26) Dividends in Excess of Net Investment Income................... - - -(4) - - - Return of Capital..................... - (.03) - - - - ---------- ---------- ---------- ---------- ---------- ---------- Total Dividends and Distributions... - (.20) (.38) (3.60) (1.59) (.41) ---------- ---------- ---------- ---------- ---------- ---------- Net Asset Value, End of Period.......... $ 28.47 $ 25.51 $ 30.99 $ 35.33 $ 35.80 $ 31.16 ========== ========== ========== ========== ========== ========== Total Return(1)......................... 11.60% (17.06)% (11.17)% 9.33% 20.32% 16.27% Ratios/Supplemental Data Net Assets, End of Period (000,000 omitted)................... $4,897 $4,346 $5,565 $5,707 $3,704 $2,906 Ratio of Expenses to Average Net Assets .95%*(3) .94%(3) .94%(3) .92% .93% .94% Ratio of Net Investment Income to Average Net Assets.................. .87%* .61% .45% .52% .24% .52% Portfolio Turnover Rate(2)............. 4% 19% 20% 22% 21% 20%
(1) Assumes hypothetical initial investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Total returns are not annualized for periods of less than one year. (2) The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. (3) Ratio of expenses to average net assets after the reduction of expenses paid indirectly was .94% for the six months ended June 30, 2003 and .93% for the years ended December 31, 2002 and 2001. (4) Less than $0.005 per share. * Annualized SEE NOTES TO FINANCIAL STATEMENTS 28 SELECTED FUNDS FINANCIAL HIGHLIGHTS SELECTED SPECIAL SHARES, INC. ================================================================================ The following financial information represents selected data for each share of capital stock outstanding throughout each period:
SIX MONTHS ENDED YEAR ENDED DECEMBER 31, JUNE 30, 2003 --------------------------------------------------------------- (UNAUDITED) 2002 2001 2000 1999 1998 ----------- ---- ---- ---- ---- ---- Net Asset Value, Beginning of Period..... $ 8.61 $ 10.50 $ 13.68 $ 16.17 $ 14.76 $ 13.03 --------- --------- --------- --------- --------- --------- Income (Loss) From Investment Operations Net Investment Loss.................... (.02) (.04) (.02) - (.09) (.08) Net Realized and Unrealized Gains (Losses)..................... 1.46 (1.81) (1.95) (.25) 2.47 3.14 --------- --------- --------- --------- --------- --------- Total From Investment Operations..... 1.44 (1.85) (1.97) (.25) 2.38 3.06 Dividends and Distributions Distributions from Realized Gains....... - (0.04) (1.21) (2.24) (.97) (1.33) Return of Capital....................... - - - - -(1) - --------- --------- --------- --------- --------- --------- Total Dividends and Distributions.... - (0.04) (1.21) (2.24) (.97) (1.33) --------- --------- --------- --------- --------- --------- Net Asset Value, End of Period........... $ 10.05 $ 8.61 $ 10.50 $ 13.68 $ 16.17 $ 14.76 ========= ========= ========= ========= ========= ========= Total Return(2).......................... 16.72% (17.62)% (14.41)% (1.10)% 16.83% 24.52% Net Assets, End of Period (000 omitted). $69,244 $59,762 $73,092 $95,222 $107,592 $94,644 Ratio of Expenses to Average Net Assets. 1.26%* 1.17%(4) 1.15%(4) 1.15% 1.17% 1.26%(3) Ratio of Net Investment Loss to Average Net Assets .................. (.39)%* (.46)% (.20)% (.25)% (.59)% (.58)% Portfolio Turnover Rate(5).............. 27% 46% 117% 35% 44% 41%
(1) Less than $0.005 per share. (2) Assumes hypothetical initial investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Total returns are not annualized for periods of less than one year. (3) Ratio of expenses to average net assets after the reduction of expenses paid indirectly was 1.25% for 1998. (4) Had the Adviser not absorbed certain expenses, the ratio of expenses to average net assets for 2002 and 2001 would have been 1.21% and 1.18%, respectively. (5) The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. * Annualized SEE NOTES TO FINANCIAL STATEMENTS 29 SELECTED FUNDS FINANCIAL HIGHLIGHTS SELECTED U.S. GOVERNMENT INCOME FUND ================================================================================ The following financial information represents selected data for each share of capital stock outstanding throughout each period:
SIX MONTHS ENDED YEAR ENDED DECEMBER 31, JUNE 30, 2003 ------------------------------------------------------------- (UNAUDITED) 2002 2001 2000 1999 1998 ----------- ---- ---- ---- ---- ---- Net Asset Value, Beginning of Period.... $ 9.07 $ 8.86 $ 8.77 $ 8.37 $ 9.04 $ 9.01 -------- -------- -------- -------- -------- -------- Income (Loss) From Investment Operations Net Investment Income................. .15 .34 .40 .44 .45 .47 Net Realized and Unrealized Gains (Losses).................... .01 .30 .09 .40 (.62) .06 --------- --------- --------- --------- --------- --------- Total From Investment Operations.... .16 .64 .49 .84 (.17) .53 Dividends and Distributions Dividends from Net Investment Income... (.15) (.34) (.40) (.44) (.45) (.47) Distributions from Realized Gains...... - (.09) - - (.05) (.03) --------- --------- --------- --------- --------- --------- Total Dividends and Distributions... (.15) (.43) (.40) (.44) (.50) (.50) --------- --------- --------- --------- --------- --------- Net Asset Value, End of Period.......... $ 9.08 $ 9.07 $ 8.86 $ 8.77 $ 8.37 $ 9.04 ========= ========= ========= ========= ========= ========= Total Return(1)......................... 1.74% 7.32% 5.71% 10.37% (1.97)% 5.90% Ratios/Supplemental Data Net Assets, End of Period (000 omitted) $5,385 $5,346 $3,977 $3,728 $4,413 $6,237 Ratio of Expenses to Average Net Assets 1.30%*(2) 1.30%(2) 1.30%(2) 1.21%(2) 1.28%(2) 1.52%(2,3) Ratio of Net Investment Income to Average Net Assets.................. 3.24%* 3.71% 4.49% 5.21% 5.15% 5.17% Portfolio Turnover Rate(4)............. 69% 126% 67% 85% 134% 36%
(1) Assumes hypothetical initial investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Total returns are not annualized for periods of less than one year. (2) Had the Adviser not absorbed certain expenses, the ratio of expenses to average net assets for the six months ended June 30, 2003 and the years ended December 31, 2002, 2001, 2000, 1999, and 1998 would have been 1.65%, 1.67%, 1.84%, 2.04%, 1.61%, and 1.62%, respectively. (3) Ratio of expenses to average net assets after the reduction of expenses paid indirectly was 1.50% for 1998. (4) The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. * Annualized SEE NOTES TO FINANCIAL STATEMENTS 30 SELECTED FUNDS FINANCIAL HIGHLIGHTS SELECTED DAILY GOVERNMENT FUND ================================================================================ The following financial information represents selected data for each share of capital stock outstanding throughout each period:
SIX MONTHS ENDED YEAR ENDED DECEMBER 31, JUNE 30, 2003 ------------------------------------------------------------------ (UNAUDITED) 2002 2001 2000 1999 1998 ----------- ---- ---- ---- ---- ---- Net Asset Value, Beginning of Period.... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 --------- --------- --------- --------- --------- --------- Income From Investment Operations Net Investment Income.................. .003 .013 .037 .056 .044 .047 Dividends and Distributions Dividends from Net Investment Income... (.003) (.013) (.037) (.056) (.044) (.047) --------- --------- --------- --------- --------- --------- Net Asset Value, End of Period.......... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 ========= ========= ========= ========= ========= ========= Total Return(1)......................... 0.33% 1.32% 3.73% 5.80% 4.48% 4.85% Ratios/Supplemental Data Net Assets, End of Period (000 omitted) $ 115,559 $ 116,187 $ 112,380 $ 130,126 $ 131,342 $ 126,203 Ratio of Expenses to Average Net Assets. .67%* .67% .66% .67% .68% .71% Ratio of Net Investment Income to Average Net Assets............... .66%* 1.30% 3.73% 5.68% 4.44% 4.74%
(1) Assumes hypothetical initial investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Total returns are not annualized for periods of less than one year. * Annualized SEE NOTES TO FINANCIAL STATEMENTS 31 SELECTED FUNDS 2949 East Elvira Road, Suite 101 Tucson, Arizona 85706 ================================================================================ DIRECTORS For the purposes of their service as directors to the Selected Funds, the business address for each of the directors is 2949 E. Elvira Road, Suite 101, Tucson, AZ 85706. Each Director serves until the age of 75, or until his or her resignation, death or removal.
NUMBER OF TERM OF PORTFOLIOS IN OFFICE AND FUND COMPLEX OTHER POSITION(S) LENGTH OF PRINCIPAL OCCUPATION(S) OVERSEEN BY DIRECTORSHIPS NAME AND AGE HELD WITH FUND TIME SERVED DURING PAST FIVE YEARS DIRECTOR HELD BY DIRECTOR - ----------------------------------------------------------------------------------------------------------------------------------- INDEPENDENT DIRECTORS WILLIAM P. BARR Director director Executive Vice President and 4 None (born 5/23/50) since 1994 General Counsel, Verizon (formerly GTE Corporation before it merged with Bell Atlantic) since July 1994; Attorney General of the United States from August 1991 to January 1993; Deputy Attorney General from May 1990 to August 1991; Assistant Attorney General from April 1989 to May 1990; Partner with the law firm of Shaw, Pittman, Potts & Trowbridge from 1984 to April 1989 and January 1993 to August 1994. FLOYD A. BROWN Director director Retired staff announcer and 4 None (born 11/5/30) since 1975 program host for WGN Radio and Television, Chicago, Illinois; sole proprietor of The Floyd Brown Co., Elgin, Illinois (advertising, media production and mass media marketing). JEROME E. HASS Director director Professor of Finance and 4 None (born 6/1/40) since 1997 Business Strategy, Johnson Graduate School of Management, Cornell University; Consultant, National Economic Research Associates; former Chief of Division of Economic Research of the Federal Power Commission and Special Assistant to James R. Schlesinger at the Executive Office of the President of the United States. KATHERINE L. MACWILLIAMS Director director Finance Director, Chief 4 None (born since 1997 Financial Officer and member 1/19/56) of the board of directors for Coors Brewing Limited (U.K.); former Vice President, International Finance, Coors Brewing Company; former Treasurer, Coors Brewing Company and Adolph Coors Company; former Vice President of Capital Markets for UBS Securities in New York; former member of the Board of International Swaps and Derivatives Association, Inc.
32 SELECTED FUNDS 2949 East Elvira Road, Suite 101 Tucson, Arizona 85706 ================================================================================ DIRECTORS - CONTINUED
NUMBER OF TERM OF PORTFOLIOS IN OFFICE AND FUND COMPLEX OTHER POSITION(S) LENGTH OF PRINCIPAL OCCUPATION(S) OVERSEEN BY DIRECTORSHIPS NAME AND AGE HELD WITH FUND TIME SERVED DURING PAST FIVE YEARS DIRECTOR HELD BY DIRECTOR - ------------------------------------------------------------------------------------------------------------------------------- INDEPENDENT DIRECTORS - CONTINUED JAMES J. MCMONAGLE Director/ director Chairman of the Selected Funds 4 None (born 10/1/44) Chairman since 1990 Board of Directors; Of Counsel to Vorys, Sater, Seymour and Pease LLP (law firm); Formerly Senior Vice President and General Counsel of University Hospitals Health System, Inc. and University Hospitals of Cleveland from 1990 to 2002; Judge of the Court of Common Pleas, Cuyahoga County, Ohio, from 1976 to 1990. RICHARD O'BRIEN Director director Retired Corporate Economist 4 Director and past (born 9/12/45) since 1996 for Hewlett-Packard Company; President, Silicon former Chairman of the Valley Roundtable; Economic Advisory Council of former Director, the California Chamber of National Commerce. Association of Business Economists. MARSHA WILLIAMS Director director Executive Vice President and 15 Director of the (born 3/28/51) since 1996 Chief Financial Officer of Davis Funds Equity Office Properties Trust (consisting of 11 (a real estate investment portfolios); trust); former Chief Director, Modine Administrative Officer of Manufacturing, Crate & Barrel (home Inc.(heat transfer furnishings retailer); former technology); Vice President and Treasurer, Director, Chicago Amoco Corporation (oil & gas Bridge & Iron company). Company, N.V. (industrial construction and engineering) INSIDE DIRECTORS* ANDREW A. DAVIS Director director President or Vice President of 15 Director of the Davis (born 6/25/63) since 1998 each Selected Fund and Davis Funds (consisting of Fund; President, Davis 11 portfolios). Selected Advisers, L.P., and also serves as an executive officer in certain companies affiliated with the Adviser.
33 SELECTED FUNDS 2949 East Elvira Road, Suite 101 Tucson, Arizona 85706 ================================================================================ DIRECTORS - CONTINUED
NUMBER OF TERM OF PORTFOLIOS IN OFFICE AND FUND COMPLEX OTHER POSITION(S) LENGTH OF PRINCIPAL OCCUPATION(S) OVERSEEN BY DIRECTORSHIPS NAME AND AGE HELD WITH FUND TIME SERVED DURING PAST FIVE YEARS DIRECTOR HELD BY DIRECTOR - ------------------------------------------------------------------------------------------------------------------------------- INSIDE DIRECTORS* - CONTINUED CHRISTOPHER C. DAVIS Director director Chief Executive Officer, 15 Director of the (born 7/13/65) since 1998 President or Vice President of Davis Funds each Selected Fund and Davis (consisting of 11 Fund; Chairman and Chief portfolios). Executive Officer, Davis Selected Advisers, L.P., and also serves as an executive officer in certain companies affiliated with the Adviser, including sole member of the Adviser's general partner, Davis Investments, LLC; Employee of Shelby Cullom Davis & Co., a registered broker/dealer.
* Andrew A. Davis and Christopher C. Davis own partnership units (directly, indirectly or both) of the Adviser and are considered to be "interested persons" of the Funds as defined in the Investment Company Act of 1940. Andrew A. Davis and Christopher C. Davis are brothers. 34 (This page has been left blank intentionally.) (This page has been left blank intentionally.) (This page has been left blank intentionally.) SELECTED FUNDS 2949 East Elvira Road, Tucson, Arizona 85706 ================================================================================ DIRECTORS OFFICERS William P. Barr James J. McMonagle Floyd A. Brown Chairman Andrew A. Davis Christopher C. Davis Christopher C. Davis President - Selected American Jerome Hass Shares & Selected Special James J. McMonagle Shares, Vice President - Selected Katherine L. MacWilliams U.S. Government Income Fund Richard O'Brien & Selected Daily Government Marsha Williams Fund Creston A. King President - Selected U.S. Government Income Fund & Selected Daily Government Fund Andrew A. Davis Vice President Kenneth C. Eich Executive Vice President & Principal Executive Officer Sharra L. Reed Vice President, Treasurer & Prinicpal Accounting Officer Thomas D. Tays Vice President & Secretary Arthur Don Assistant Secretary INVESTMENT ADVISER Davis Selected Advisers, L.P 2949 East Elvira Road, Suite 101 Tucson, Arizona 85706 (800) 243-1575 DISTRIBUTOR Davis Distributors, LLC 2949 East Elvira Road, Suite 101 Tucson, Arizona 85706 TRANSFER AGENT & CUSTODIAN State Street Bank and Trust Company c/o Selected Funds P.O. Box 8243 Boston, Massachusetts 02266-8243 AUDITORS KPMG LLP 707 Seventeenth Street, Suite 2700 Denver, Colorado 80202 COUNSEL D'Ancona & Pflaum LLC 111 E. Wacker Drive Chicago, Illinois 60601-4205 ================================================================================ FOR MORE INFORMATION ABOUT THE SELECTED FUNDS, INCLUDING MANAGEMENT FEE, CHARGES AND EXPENSES, SEE THE CURRENT PROSPECTUS WHICH MUST PRECEDE OR ACCOMPANY THIS REPORT. THE FUNDS' STATEMENT OF ADDITIONAL INFORMATION CONTAINS ADDITIONAL INFORMATION ABOUT THE FUNDS' DIRECTORS AND IS AVAILABLE WITHOUT CHARGE UPON REQUEST BY CALLING 1-800-243-1575. A COPY OF THE FUNDS' PROXY VOTING POLICIES AND PROCEDURES IS AVAILABLE WITHOUT CHARGE UPON REQUEST BY CALLING 1-800-243-1575 OR ON THE FUNDS WEBSITE AT WWW.SELECTEDFUNDS.COM OR ON THE SEC WEBSITE AT WWW.SEC.GOV. ================================================================================ INVESTMENT ADVISER Davis Selected Advisers, L.P. 2949 East Elvira Road, Suite 101 Tucson, AZ 85706 DISTRIBUTOR Davis Distributors, LLC 2949 East Elvira Road, Suite 101 Tucson, AZ 85706 TRANSFER AGENT AND CUSTODIAN State Street Bank & Trust Company c/o Selected Funds P.O. Box 8243 Boston, MA 02266-8243 LEGAL COUNSEL D'Ancona & Pflaum LLC 111 E. Wacker Drive, Suite 2800 Chicago, IL 60601-4205 AUDITORS KPMG, LLP 707 Seventeenth Street, Suite 2700 Denver, CO 80202 800-243-1575 www.selectedfunds.com Item 2. Code of Ethics - Not Required Item 3. Audit Committee Financial Expert - Not Required Item 4. Principal Accountant Fees and Services - Not Required Item 5. Audit Committee of Listed Registrants - Not Required Item 6. Reserved Item 7. Disclosure of Proxy Voting Polices and Procedures for Closed-End Management Investment Companies - Not Applicable Item 8. Reserved Item 9. Controls and Procedures (a) The registrant's principal executive officer and principal financial have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-2(c) under the Investment Company Act of 1940, as amended) are effective as of a date within 90 days of the filing date of this report. (b) There have been no significant changes in the registrant's internal controls or in other factors that could significantly affect these controls. Item 10. Exhibits (a) Code of Ethics - Not Required (b) Sections 302 and 906 certifications of the Sarbanes-Oxley Act of 2002 are attached as exhibits 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 it behalf by the undersigned, thereunto duly authorized. SELECTED AMERICAN SHARES, INC. By /s/ Kenneth C. Eich Kenneth C. Eich Principal Executive Officer Date: August 29, 2003 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/ Kenneth C. Eich Kenneth C. Eich Principal Executive Officer Date: August 29, 2003 By /s/ Sharra L. Reed Sharra L. Reed Principal Financial officer Date: August 29, 2003 EX-99.CERT 3 cert302_sas.txt SECTION 302 CERTIFICATION SELECTED AMERICAN SHARES, INC. 2949 East Elvira Road, Suite 101 Tucson, Arizona 85706 (520) 434-3771 CERTIFICATION Pursuant to Section 302 I, Kenneth C. Eich, certify that: 1. I have reviewed this report on Form N-CSR of Selected American Shares, Inc.; 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 financial information included in this report, and the financial statements on which the financial information is based, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 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-2(c) under the Investment Company Act) for the registrant and have: a) designed such disclosure controls and procedures 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) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this report (the "Evaluation Date"); and c) presented in this report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation, 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 in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize, and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officer(s) and I have indicated in this report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: August 29, 2003 /s/ Kenneth C. Eich Kenneth C. Eich Principal Executive Officer Selected American Shares, Inc. SELECTED AMERICAN SHARES, INC. 2949 East Elvira Road, Suite 101 Tucson, Arizona 85706 (520) 434-3771 CERTIFICATION Pursuant to Section 302 I, Sharra L. Reed certify, that: 1. I have reviewed this report on Form N-CSR of Selected American Shares, Inc.; 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 financial information included in this report, and the financial statements on which the financial information is based, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 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-2(c) under the Investment Company Act) for the registrant and have: a) designed such disclosure controls and procedures 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) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this report (the "Evaluation Date"); and c) presented in this report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation, 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 in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize, and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officer(s) and I have indicated in this report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: August 29, 2003 /s/ Sharra L. Reed Sharra L. Reed Principal Financial Officer Selected American Shares, Inc. EX-99.906 CERT 4 cert906_sas.txt SECTION 906 CERTIFICATION SELECTED AMERICAN SHARES, INC. 2949 East Elvira Road, Suite 101 Tucson, Arizona 85706 (520) 434-3771 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2003 KENNETH C. EICH, Principal Executive Officer, and SHARRA L. REED, Principal Financial Officer of Selected American Shares, Inc. (the "Registrant"), each certify to the best of his or her knowledge that: (1) The Registrant's periodic report on Form N-CSR for the period ended June 30, 2003 (the "Form N-CSR") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and (2) The information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant. Principal Executive Officer Principal Financial Officer SELECTED AMERICAN SHARES, INC. SELECTED AMERICAN SHARES, INC. /s/ Kenneth C. Eich /s/ Sharra L. Reed Kenneth C. Eich Sharra L. Reed Principal Executive Officer Principal Financial Officer Date: August 29, 2003 Date: August 29, 2003 A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2003 has been provided to SELECTED AMERICAN SHARES, INC. and will be retained by SELECTED AMERICAN SHARES, INC. and furnished to the Securities and Exchange Commission (the "Commission") or its staff upon request. This certification is being furnished to the Commission solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Form N-CSR filed with the Commission. -----END PRIVACY-ENHANCED MESSAGE-----