<PAGE>
- --------------------------------------------------------------------------------
- ----------------------------------
BERGSTROM
CAPITAL
CORPORATION
- ----------------------------------
1997 THIRD QUARTER REPORT
Listed: American Stock Exchange (Ticker symbol: BEM)
Transfer Agent, Registrar and Custodian: State Street Bank and Trust Company,
Boston, Massachusetts
Independent Auditors: Deloitte & Touche LLP, Boston, Massachusetts
Legal Counsel: Howard, Rice, Nemerovski, Canady, Falk & Rabkin PC,
San Francisco, California
- --------------------------------------------------------------------------------
<PAGE>
BERGSTROM CAPITAL CORPORATION
- --------------------------------------------------------------------------------
STOCKHOLDER MEETING RESULTS
The Annual Meeting of Stockholders of Bergstrom Capital Corporation (the
"Company") was held on Monday, November 3, 1997 at the Cutter Room, The Rainier
Club, Fourth Avenue and Marion Street, Seattle, Washington. The two matters
voted upon by Stockholders and the resulting votes for each matter are
presented below.
1. The election of three directors, Erik E. Bergstrom and George Cole
Scott to hold office until the Annual Meeting of Stockholders in 2000
and William H. Sperber to hold office until the Annual Meeting of
Stockholders in 1998, and in all cases until their respective
successors shall be elected and shall qualify.
<TABLE>
<CAPTION>
ELECTED DIRECTOR FOR WITHHELD BROKER NON-VOTES*
<S> <C> <C> <C>
Erik E. Bergstrom 961,885 5,736 0
George Cole Scott 962,020 5,601 0
William H. Sperber 961,520 6,101 0
<CAPTION>
OTHER CONTINUING DIRECTORS PRESENT TERM EXPIRES
<S> <C>
William L. McQueen 1999
Norman R. Nielsen 1999
</TABLE>
2. Ratification or rejection of the selection by the Company's Board of
Directors of Deloitte & Touche LLP as the independent auditors of the
Company for the year ending December 31, 1997.
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN BROKER NON-VOTES*
<S> <C> <C> <C>
959,484 3,057 5,080 0
</TABLE>
* Broker non-votes are proxies received by the Company from brokers or
nominees when the broker or nominee neither has received instructions from
the beneficial owner or other persons entitled to vote nor has discretionary
power to vote on a particular matter.
<PAGE>
BERGSTROM CAPITAL CORPORATION
- -------------------------------------------------------------------------------
DISTRIBUTION POLICY
The Company's distribution policy, which was adopted by the Board of
Directors on May 12, 1997, provides for an annual distribution to the
Company's stockholders, during the month of June each year, of a cash dividend
at the rate of a minimum of 6 percent of the Company's net asset value per
share as calculated on the last business day in March of that year. The Board
of Directors may modify or terminate the distribution policy at any time at
its discretion.
On June 9, 1997, the Company paid a cash dividend of $8.50 per share to
stockholders of record on May 22, 1997. This dividend was the annual
distribution for the year 1997 under the Company's distribution policy. The
Company does not intend to pay further dividends in 1997.
Under the distribution policy, distributions in any year in excess of the
Company's net investment income and net realized capital gains for such year
will constitute a return of stockholders' capital. For federal income tax
purposes, any return of capital will generally be treated as a non-taxable
recovery of basis to the extent of the stockholders' basis in their shares,
and as capital gain to the extent that the return of capital is in excess of
such basis.* The Company will be required to liquidate a portion of its
portfolio in order to fund any return of capital. Any return of capital will
also reduce the assets of the Company available for investment and will likely
have the effect of increasing the Company's expense ratio.
In any year in which the total of the Company's net investment income and
net realized capital gains exceeds the amount distributed for that year under
the distribution policy, the Company may, at the discretion of the Board of
Directors, retain a portion of the net realized long-term capital gains for
such year. The Company intends to retain any undistributed net long-term
capital gains realized during the year 1997.
* The portion of any return of capital representing the Company's accumulated
earnings and profits from prior years will be treated as ordinary income.
The Company's accumulated earnings and profits as of December 31, 1996
amounted to $155,052.
<PAGE>
BERGSTROM CAPITAL CORPORATION
- -------------------------------------------------------------------------------
NOTICE OF IMPORTANT FEDERAL INCOME TAX INFORMATION
It is the presently declared policy of the Board of Directors, which is
subject to review by the Board of Directors from time to time, that in any
year in which the Company is taxed as a regulated investment company all or a
portion of the net long-term capital gains of the Company for such year may be
retained by the Company, and if such gains are retained taxes thereon would be
paid by the Company and appropriate credit therefore allowed to the
stockholders of the Company, all as provided in Section 852(b)(3)(D) of the
Internal Revenue Code. Stockholders of record on December 31 of such year
would be required to include in their income tax returns their share of the
Company's net long-term capital gains retained and take credit for the tax
paid on their behalf by the Company. Stockholders of record on December 31 of
such year should increase the tax basis of their stock by the excess of their
share of the net long-term capital gains retained over the tax paid on their
behalf. On or about February 1 following the end of such year the Company
would send Form 2439, Notice to Shareholders of Undistributed Capital Gains,
to stockholders of record on December 31 of such year. For the years 1980
through 1984, 1986, 1987, 1989, and 1991 through 1996, the Company retained
all or a portion of the net long-term capital gains realized. For the years
1985, 1988 and 1990 all of the net long-term capital gains realized were
distributed.
The Board of Directors has elected to distribute a portion of the net long-
term capital gains realized during the year ending December 31, 1997 as a part
of the $8.50 per share cash dividend paid on June 9, 1997, and to retain the
remainder of the net long-term capital gains realized during the year ending
December 31, 1997.
A Form 1099 will be mailed by January 31, 1998 to each stockholder of record
on the dividend record date in 1997 setting forth the specific amounts to be
included in that stockholder's 1997 tax return.
<PAGE>
BERGSTROM CAPITAL CORPORATION
- -------------------------------------------------------------------------------
505 Madison Street, Suite 220
Seattle, Washington 98104
November 3, 1997
Dear Fellow Stockholders:
On November 3, 1997, Clayton H. Williams retired from the Company's Board of
Directors, after serving 19 years as a director of the Company. We express our
sincere appreciation to Mr. Williams for his many years of loyal service to
the Company. His counsel will be missed. At the Annual Meeting of Stockholders
on November 3, 1997, William H. Sperber was elected to fill the director
position opened by Mr. Williams' retirement. We welcome Mr. Sperber to the
Board of Directors.
During the first nine months of 1997 the Company's net assets increased from
$151,427,077 to $167,944,133 which is an increase of $16,517,056. This
increase in net assets is after payment by the Company of $9,297,300 in
dividends ($8.50 per share on June 9, 1997). This increase is also after the
repurchase of stock during the first nine months of 1997 for $7,394,082. The
increase in net assets, before deducting the payment of dividends and the
repurchase of stock, was $33,208,438 which was composed of net investment
income of $466,774, realized gain on investments of $22,020,266, and an
increase in unrealized appreciation of $10,721,398.
The per share net asset value (based on the number of shares outstanding at
the end of each period) increased from $136.15 on December 31, 1996 to $159.10
on September 30, 1997. After adjustment for the dividends, the per share net
asset value increased 23.1%. During the same period the Dow Jones Industrial
Average, adjusted for dividends, increased 24.9% and the Standard & Poor's 500
Stock Average, adjusted for dividends, increased 29.6%. The per share net
asset value on Friday, October 31, 1997 was $156.35.
On February 26, 1996, the Company's Board of Directors authorized the
Company to purchase, on the American Stock Exchange, up to 50,000 shares of
its capital stock at market prices not in excess of the then current net asset
value per share. During the first nine months of 1997 the Company purchased
the remaining 12,200 shares of its capital stock under this authorization.
On February 10, 1997, the Company's Board of Directors authorized the
Company to purchase, on the American Stock Exchange, up to 100,000 shares of
its capital stock at market prices not in excess of the then current net asset
value per share. During the first nine months of 1997 the Company purchased
44,400 shares of its capital stock under this authorization. As of September
30, 1997 the Company had 55,600 shares remaining under this authorization.
During the first nine months of 1997 the Company had total interest and
dividend income of $1,371,677 as compared to $1,367,804 for the same period in
1996 for an increase of $3,873. During the first nine months of 1997 operating
expenses were $904,903 which is a $45,778 increase from $859,125 for the first
nine months of 1996. The resulting net investment income of $466,744 for the
first nine months of 1997 is a decrease from $508,679 for the first nine
months of 1996. This resulted in a decrease to $.43 per share versus $.44 per
share.
The following are the major ($500,000 or more) purchases and sales made in
the Company's portfolio of securities during the third quarter of 1997,
excluding changes resulting from reorganizations and stock splits:
<PAGE>
BERGSTROM CAPITAL CORPORATION
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES
-----------------------------------------
HELD
SECURITY NAME ADDITIONS REDUCTIONS SEPTEMBER 30, 1997
- ------------------------ --------- ---------- ------------------
<S> <C> <C> <C>
ASM Lithography Holding
N V.................... 7,000 7,000
Comerica, Inc........... 23,000 0
Kimberly Clark Corp..... 30,000 0
Medtronic, Inc.......... 9,000 18,000
Merrill Lynch Convert-
ible Fund, Inc......... 106,081(1) 406,081
Schlumberger, Ltd....... 14,000 0
U.S. Bancorp DEL........ 14,000 14,000
Washington Mutual, Inc.. 13,000 13,000
</TABLE>
- -------
(1)Received as a dividend reinvestment.
The value of the Company's investment in the securities of Amgen, Inc.
amounted to 10.2% of the Company's total assets at September 30, 1997. The
investment of a substantial percentage of the Company's assets in the
securities of a single issuer or industry exposes the Company to a greater
risk of loss resulting from unfavorable price movements or market conditions
relating to such issuer or industry.
The Company does not have a dividend reinvestment program. The Company has
considered this over the years and has determined that the cost of such a
program would not be commensurate with the benefit. The Company's policy of
retaining a portion of the net long-term capital gains in certain years
accomplishes some of the same goals as would a dividend reinvestment program.
The Company's shares of capital stock are traded on the American Stock
Exchange and are identified by the stock ticker symbol BEM. The net asset
value per share as of Friday's close of business is published each Saturday in
Barrons and each Monday in the Wall Street Journal, the New York Times and
certain other publications under "Closed-End Funds."
Your Company welcomes questions or comments from stockholders. If you wish
to communicate with the Company's transfer agent, State Street Bank and Trust
Company, the address is P.O. Box 8200, Boston, Massachusetts 02266-
8200 and the telephone number is 1-800-426-5523.
Yours very truly,
/s/ WILLIAM L. McQUEEN
William L. McQueen
President
<PAGE>
BERGSTROM CAPITAL CORPORATION
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1997 (Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investments, at value (see accompanying schedule)
Short-term investments (cost $10,510,324) $ 10,510,324
Common stocks (cost $70,538,646) 158,045,161
------------
TOTAL INVESTMENTS (COST $81,048,970) 168,555,485
Cash 6,172
Receivable for securities sold 288,201
Interest and dividends receivable 105,451
Other assets 5,216
------------
TOTAL ASSETS 168,960,525
------------
LIABILITIES:
Advisory fee payable 68,397
Payable for securities purchased 160,426
Payable for capital stock repurchased 759,231
Other accrued expenses 28,338
------------
TOTAL LIABILITIES 1,016,392
------------
NET ASSETS applicable to 1,055,600 outstanding shares of capi-
tal stock equivalent to $159.10 per share on September 30,
1997 $167,944,133
============
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
NINE MONTHS
ENDED YEAR ENDED
SEPTEMBER 30, 1997 DECEMBER 31,
(UNAUDITED) 1996
<S> <C> <C>
OPERATIONS:
Net investment income $ 466,774 $ 652,522
Realized gain on investments 22,020,266 13,780,358
Increase in unrealized appreciation 10,721,398 1,523,330
------------ ------------
Net increase in net assets resulting from
operations 33,208,438 15,956,210
------------ ------------
DIVIDENDS TO STOCKHOLDERS:
From net investment income (466,774) (652,522)
From net realized gain on investments (8,830,526) (7,166,898)
------------ ------------
Total dividends to stockholders ($8.50
per share--1997; $6.9125 per share--
1996) (9,297,300) (7,819,420)
------------ ------------
COST OF SHARES OF BERGSTROM CAPITAL CORPO-
RATION STOCK PURCHASED (56,600 SHARES--
1997; 51,500 SHARES--1996) (7,394,082) (6,066,937)
------------ ------------
TOTAL INCREASE IN NET ASSETS 16,517,056 2,069,853
NET ASSETS, BEGINNING OF PERIOD 151,427,077 149,357,224
------------ ------------
NET ASSETS, END OF PERIOD $167,944,133 $151,427,077
============ ============
</TABLE>
See also Notes to Financial Statements in the Company's 1997 Semi-Annual Report
to Stockholders.
<PAGE>
BERGSTROM CAPITAL CORPORATION
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 (Unaudited)
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest $ 586,384
Dividends 785,293
-----------
TOTAL INCOME 1,371,677
-----------
EXPENSES:
Advisory fees 699,150
Legal fees 36,134
Auditing fees 50,400
Stockholders' meeting and reports 12,011
Transfer agent fees and expenses 18,931
Custodian fees 19,600
Directors' fees and expenses 33,321
Fee for shares listed on American Stock Exchange 5,250
State and other taxes 15,588
Other 14,518
-----------
TOTAL EXPENSES 904,903
-----------
NET INVESTMENT INCOME ($.43 PER SHARE) 466,774
-----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Realized gain on investments (excluding short-term
investments):
Proceeds from sale of securities $53,327,430
Cost of securities sold 32,699,800
-----------
Realized gain on investments sold 20,627,630
Capital gain distributions received 1,392,636
-----------
Realized gain on investments 22,020,266
Unrealized appreciation of investments:
Beginning of period 76,785,117
End of period 87,506,515
-----------
Increase in unrealized appreciation 10,721,398
-----------
NET GAIN ON INVESTMENTS ($29.98 PER SHARE) 32,741,664
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERA-
TIONS $33,208,438
===========
</TABLE>
See also Notes to Financial Statements in the Company's 1997 Semi-Annual Report
to Stockholders.
<PAGE>
BERGSTROM CAPITAL CORPORATION
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
September 30, 1997 (Unaudited)
<TABLE>
<CAPTION>
SHARES OR PRINCIPAL AMOUNT COST VALUE
<C> <S> <C> <C>
SHORT-TERM INVESTMENTS (6.2%):
$ 7,026,000 State Street Bank and Trust Company,
5.25% Euro-Dollar Deposit due 10/01/97 $ 7,026,000 $ 7,026,000
3,500,000 General Motors Acceptance Corp., 5.56%
Note due 10/30/97 3,484,324 3,484,324
----------- ----------- ------------
$10,526,000 TOTAL--SHORT-TERM INVESTMENTS 10,510,324 10,510,324
=========== ----------- ------------
COMMON STOCKS (93.8%):
AEROSPACE AND DEFENSE (0.7%):
20,000 Sundstrand Corp. 505,395 1,152,500
----------- ------------
BANKS (3.9%):
18,000 BB&T Corporation 821,846 961,875
24,000 Bank New York, Inc. 933,258 1,152,000
13,000 Citicorp 1,347,574 1,741,188
12,500 Morgan (J.P.) & Co., Inc. 792,626 1,420,313
14,000 U.S. Bancorp DEL 1,244,331 1,351,000
----------- ------------
5,139,635 6,626,376
----------- ------------
BEVERAGES (4.0%):
72,000 Coca Cola Enterprises, Inc. 990,732 1,939,500
77,500 Coca-Cola Co. 104,001 4,722,656
----------- ------------
1,094,733 6,662,156
----------- ------------
BIOTECHNOLOGY (10.2%):
360,000 Amgen, Inc. (B) 1,880,819 17,257,500
----------- ------------
BUSINESS SERVICES (3.9%):
50,000 Cognizant Corporation 1,641,500 2,037,500
135,000 Huntingdon Life Sciences Group PLC ADR 741,765 506,250
100,000 Manpower, Inc. 1,671,364 3,950,000
----------- ------------
4,054,629 6,493,750
----------- ------------
CHEMICALS (0.5%):
12,000 BetzDearborn, Inc. 797,977 820,500
----------- ------------
COMMUNICATION SYSTEMS (2.7%):
7,000 ASM Lithography Holding N V 630,364 691,250
20,000 SBC Communications, Inc. 179,424 1,227,500
75,600 Worldcom, Inc. 1,440,418 2,674,350
----------- ------------
2,250,206 4,593,100
----------- ------------
COMPUTERS AND INFORMATION (0.9%):
14,000 Hewlett Packard Co. 492,639 973,875
4,500 International Business Machines 438,239 476,719
----------- ------------
930,878 1,450,594
----------- ------------
</TABLE>
<PAGE>
BERGSTROM CAPITAL CORPORATION
- --------------------------------------------------------------------------------
SHARES OR PRINCIPAL AMOUNT
<TABLE>
<CAPTION>
COMMON STOCKS (UNAUDITED)--CONTINUED
COST VALUE
<C> <S> <C> <C>
COSMETICS/PERSONAL CARE (0.5%):
14,000 Avon Products, Inc. $ 418,369 $ 868,000
----------- -----------
DIVERSIFIED TECHNOLOGY (1.3%):
23,000 Nokia Corp. Sponsored ADR 858,978 2,159,125
----------- -----------
DRUGS AND HEALTH SUPPLIES (7.3%):
9,000 Bergen Brunswig Corp. 375,503 363,375
9,000 Glaxo PLC ADR 290,790 404,437
62,000 Guidant Corp. 988,169 3,472,000
20,000 Johnson & Johnson 898,474 1,152,500
18,000 Medtronic, Inc. 564,209 846,000
12,000 Merck & Co., Inc. 770,986 1,199,250
30,000 Pfizer, Inc. 1,283,208 1,801,875
62,000 Smithkline Beecham PLC ADR 1,295,975 3,030,250
----------- -----------
6,467,314 12,269,687
----------- -----------
ELECTRICAL COMPONENTS (1.3%):
28,000 General Electric Co. 1,211,090 1,905,750
69,000 Micro-Metrics, Inc. (A,B) 227,700 25,268
12,000 Westinghouse Electric Corp. 332,504 324,750
----------- -----------
1,771,294 2,255,768
----------- -----------
ELECTRONICS/NEW TECHNOLOGY (5.5%):
8,000 Altera Corp. 416,680 410,000
15,000 Analog Devices, Inc. 350,486 502,500
14,000 Cisco Systems, Inc. 987,803 1,022,875
33,000 Ericsson L M Tel Co ADR 786,857 1,581,937
18,000 Intel Corp. 542,187 1,661,625
11,000 Lucent Technologies, Inc. 508,107 895,125
28,000 Newbridge Networks Corp. 904,550 1,676,500
54,000 Nextel Communications, Inc. 781,200 1,559,250
----------- -----------
5,277,870 9,309,812
----------- -----------
FINANCIAL SERVICES, DIVERSIFIED (2.2%):
15,000 Amresco, Inc. 324,375 556,875
25,000 Federal National Mortgage Association 645,849 1,175,000
34,000 Golden State Bancorp, Inc. (C) 937,264 1,015,750
13,000 Washington Mutual, Inc. 794,339 906,750
----------- -----------
2,701,827 3,654,375
----------- -----------
FOOD PROCESSING (0.8%):
14,000 Pioneer Hi-Bred International, Inc. 862,848 1,274,000
----------- -----------
</TABLE>
<PAGE>
BERGSTROM CAPITAL CORPORATION
- --------------------------------------------------------------------------------
SHARES OR PRINCIPAL AMOUNT
<TABLE>
<CAPTION>
COMMON STOCKS (UNAUDITED)--CONTINUED
COST VALUE
<C> <S> <C> <C>
HARDWARE AND TOOLS (0.6%):
20,000 Snap-On, Inc. $ 585,650 $ 921,250
----------- ------------
HOUSEHOLD PRODUCTS (NON-DURABLE)
(1.0%):
24,000 Proctor & Gamble Co. 572,220 1,657,500
----------- ------------
INDUSTRIAL MACHINERY (2.2%):
46,000 Tyco International Ltd. New (D) 1,550,614 3,774,875
----------- ------------
INSURANCE (2.0%):
25,987 American International Group, Inc. 490,850 2,681,534
13,000 PMI Group, Inc. 580,301 745,063
----------- ------------
1,071,151 3,426,597
----------- ------------
LODGING (1.7%):
29,000 Doubletree Corp. 1,159,997 1,399,250
20,000 Marriott International, Inc. 540,111 1,421,250
----------- ------------
1,700,108 2,820,500
----------- ------------
MEDIA (1.4%):
Comcast UK Cable Partners Ltd. CI. A
51,000 Com 650,250 522,750
15,000 Disney (Walt) Co. 560,460 1,209,375
21,000 Gartner Group, Inc. New Cl. A 526,200 630,000
----------- ------------
1,736,910 2,362,125
----------- ------------
MEDICAL SUPPLIES (3.6%):
12,900 Abbott Laboratories 452,270 824,794
100,000 Baxter International, Inc. 880,840 5,225,000
----------- ------------
1,333,110 6,049,794
----------- ------------
OFFICE EQUIPMENT (0.8%):
10,000 Quantum Corp. 403,971 383,125
11,000 Xerox Corp. 804,150 926,062
----------- ------------
1,208,121 1,309,187
----------- ------------
PHARMACEUTICALS (7.1%):
16,000 Bristol-Myers Squibb Co. 215,411 1,324,000
39,000 Lilly Eli & Co. 1,351,106 4,697,063
28,000 Schering-Plough Corp. 487,839 1,442,000
34,000 Warner Lambert Co. 1,702,611 4,587,875
----------- ------------
3,756,967 12,050,938
----------- ------------
POLLUTION CONTROL (0.2%):
8,700 Culligan Water Technologies, Inc. 388,021 400,200
----------- ------------
</TABLE>
<PAGE>
BERGSTROM CAPITAL CORPORATION
- -------------------------------------------------------------------------------
SHARES OR PRINCIPAL AMOUNT
<TABLE>
<CAPTION>
COMMON STOCKS (UNAUDITED)--CONTINUED
COST VALUE
<C> <S> <C> <C>
RECREATION--TOYS (0.6%):
37,500 Hasbro, Inc. $ 926,822 $ 1,054,687
----------- ------------
REGULATED INVESTMENT COMPANIES (8.7%):
50,000 Latin America Growth Fund, Inc. 528,218 590,625
67,500 Latin America Investment Fund 1,123,775 1,274,062
Merrill Lynch Convertible Fund, Inc.
406,081 (E) 4,401,721 5,303,422
325,000 RCM Growth Equity Fund, Inc. 2,005,250 2,551,250
145,000 RCM International Growth Equity Fund A 1,875,370 2,298,250
175,000 RCM Small Cap Fund 1,961,750 2,598,750
----------- ------------
11,896,084 14,616,359
----------- ------------
RESTAURANTS (2.6%):
106,000 Host Marriott Corp. 1,577,381 2,411,500
42,000 McDonalds Corp. 1,184,151 2,000,250
----------- ------------
RETAIL TRADE (2.5%):
29,000 Bed Bath & Beyond, Inc. 757,687 1,018,625
31,250 Consolidated Stores Corp. 896,115 1,308,594
25,000 Crown Books Corporation (B) 309,500 262,500
18,000 CVS Corporation 687,129 1,023,750
18,000 Hannaford Bros. Co. 448,648 640,125
----------- ------------
3,099,079 4,253,594
----------- ------------
SOFTWARE AND PROCESSING (13.1%):
12,000 America Online, Inc. 564,298 905,250
13,000 Automatic Data Processing, Inc. 285,181 650,000
573,750 Boole & Babbage, Inc. (B) 340,000 16,495,312
24,000 Microsoft Corp. (B) 999,600 3,175,500
24,000 Sterling Commerce, Inc. 750,406 862,500
----------- ------------
2,939,485 22,088,562
----------- ------------
TOTALS--COMMON STOCKS 70,538,646 158,045,161
----------- ------------
TOTALS--INVESTMENTS $81,048,970 $168,555,485
=========== ============
</TABLE>
(A) Company "affiliated" with the Corporation as defined in the Investment
Company Act of 1940. There were no purchases or sales of this security
during the first nine months of 1997, nor was any income earned.
(B) Non-income producing securities.
(C) Formerly Glendale Federal Bank FSB.
(D) Formerly Tyco International Ltd.
(E) Convertible Holdings, Inc., a closed-end fund, was converted into Merrill
Lynch Convertible Fund, Inc., an open-end fund.
See also Notes to Financial Statements in the Company's 1997 Semi-Annual
Report to Stockholders.
<PAGE>
- --------------------------------------------------------------------------------
BOARD OF DIRECTORS
ERIK E. BERGSTROM GEORGE COLE SCOTT
Chairman Registered Representative
Anderson & Strudwick Incorporated
President
WILLIAM L. McQUEEN Closed-End Fund Advisors, Inc.
President and Treasurer
WILLIAM H. SPERBER
NORMAN R. NIELSEN President, Chief Executive Officer and Managing
Manager and Senior Member Director
of Research Staff The Trust Company of Washington
SRI International
OFFICERS
WILLIAM L. McQUEEN PAMELA A. FIORINI
President and Treasurer Secretary
ELIZABETH C. HEDLUND
Assistant Secretary
- --------------------------------------------------------------
BERGSTROM CAPITAL CORPORATION
505 Madison Street, Suite 220
Seattle, Washington 98104
(206) 623-7302
- --------------------------------------------------------------------------------
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