<PAGE>
- --------------------------------------------------------------------------------
- ----------------------------------
BERGSTROM
CAPITAL
CORPORATION
- ----------------------------------
1998 THIRD QUARTER REPORT
Listed: American Stock Exchange (Tickersymbol: 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 9, 1998 at the Cutter Room, The
Rainier Club, Fourth Avenue and Marion Street, Seattle, Washington. The three
matters voted upon by Stockholders and the resulting votes for each matter are
presented below.
1. To elect one director to hold office until the Annual Meeting of
Stockholders in 2001 and until his successor shall be elected and shall
qualify.
<TABLE>
<S> <C> <C> <C>
ELECTED DIRECTOR FOR WITHHELD BROKER NON-VOTES*
William H. Sperber 920,338 8,204 0
OTHER CONTINUING
DIRECTORS PRESENT TERM EXPIRES
Erik E. Bergstrom 2000
William L. McQueen 1999
Norman R. Nielsen 1999
George Cole Scott 2000
</TABLE>
2. To ratify or reject 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, 1998.
<TABLE>
<S> <C> <C> <C>
FOR AGAINST ABSTAIN BROKER NON-VOTES*
921,690 2,405 4,447 0
</TABLE>
3. To approve or disapprove a new Investment Management and Advisory
Agreement between the Company and Dresdner RCM Global Investors LLC.
<TABLE>
<S> <C> <C> <C>
FOR AGAINST ABSTAIN BROKER NON-VOTES*
642,773 6,575 8,559 270,635
</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 8, 1998, the Company paid a cash dividend of $10.75 per share to
stockholders of record on May 21, 1998. This dividend was the annual
distribution for the year 1998 under the Company's distribution policy.
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 Board of Directors has elected to retain any undistributed net
long-term capital gains realized during the year 1998.
<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. The Internal Revenue Code provides that, within 60 days 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. The Internal Revenue Code also provides that, if a stockholder owned
shares registered in the name of a broker or nominee on December 31 of such
year, the broker or nominee would send Form 2439 to such stockholder within 90
days following the end of such year. For the years 1980 through 1984, 1986,
1987, 1989, and 1991 through 1997, 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, 1998 as a part
of the $10.75 per share cash dividend paid on June 8, 1998, and to retain the
remainder of the net long-term capital gains realized during the year ending
December 31, 1998.
A Form 1099 will be mailed by January 31, 1999 to all stockholders of record
on the dividend record date in 1998 setting forth the specific amounts to be
included in their 1998 tax returns.
<PAGE>
BERGSTROM CAPITAL CORPORATION
- -------------------------------------------------------------------------------
505 Madison Street, Suite 220
Seattle, Washington 98104
November 9, 1998
Dear Fellow Stockholders:
During the first nine months of 1998 the Company's net assets increased from
$158,894,821 to $158,944,960 which is an increase of $50,139. This increase in
net assets is after payment by the Company of $10,927,375 in dividends ($10.75
per share on June 8, 1998). This increase is also after the repurchase of
stock during the first nine months of 1998 for $3,988,754. The increase in net
assets, before deducting the payment of dividends and the repurchase of stock,
was $14,966,268 which was composed of net investment income of $190,680,
realized gain from the sale of investments of $22,023,880, and a decrease in
unrealized appreciation of $7,248,292.
The per share net asset value (based on the number of shares outstanding at
the end of each period) increased from $154.51 on December 31, 1997 to $158.77
on September 30, 1998. After adjustment for the dividends, the per share net
asset value increased 9.7%. During the same period the Dow Jones Industrial
Average, adjusted for dividends, increased .6% and the Standard & Poor's 500
Stock Average, adjusted for dividends, increased 6.0%. The per share net asset
value on Friday, November 6, 1998 was $179.18.
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 1998 the Company purchased 27,300 shares
of its capital stock under this authorization. As of September 30, 1998 the
Company had 1,100 shares remaining under this authorization. During the month of
October 1998 the Company purchased the remaining 1,100 shares of its capital
stock under this authorization.
During the first nine months of 1998 the Company had total interest and
dividend income of $1,146,219 as compared to $1,371,677 for the same period in
1997 for a decrease of $225,458. During the first nine months of 1998
operating expenses were $955,539 which is a $50,636 increase from $904,903 for
the first nine months of 1997. The resulting net investment income of $190,680
for the first nine months of 1998 is a decrease of $276,094 from $466,774 for
the first nine months of 1997. This resulted in a decrease to $.19 per share
versus $.43 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 1998:
<PAGE>
BERGSTROM CAPITAL CORPORATION
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES
-----------------------------------------
HELD
SECURITY NAME ADDITIONS REDUCTIONS SEPTEMBER 30, 1998
- --------------------------------------- --------- ---------- ------------------
<S> <C> <C> <C>
America Online, Inc. .................. 6,000 20,000
Camco International, Inc. ............. 9,000 0
Compaq Computer Corp. ................. 15,000 15,000
Gillette Co. .......................... 34,000 34,000
Grainger W W, Inc. .................... 18,000 0
GTE Corp. ............................. 11,000 11,000
HBO & Co. ............................. 18,000 0
Hewlett Packard Co. ................... 21,000 0
Host Marriott Corp. ................... 34,000 49,000
IMS Health, Inc. ...................... 50,000(1) 15,000 35,000
Intel Corp. ........................... 9,000 20,000
Intermedia Communications FLA, Inc. ... 19,000 28,000 19,000
Medtronic, Inc. ....................... 11,000 14,000
Perkin-Elmer Corp. .................... 9,000 9,000
Promus Hotel Corp. New................. 19,000 0
Revlon, Inc. .......................... 11,000 11,000
Smithkline Beecham PLC ADR............. 11,000 25,000
Southtrust Corp. ...................... 22,500 0
Star Banc Corp. ....................... 17,000 17,000
</TABLE>
- -------
(1) Received as a distribution from Nielsen Media Research, Inc. (formerly
Cognizant Corporation).
At the Annual Meeting of Stockholders on November 9, 1998 the stockholders
approved a new Investment Management and Advisory Agreement appointing
Dresdner RCM Global Investors LLC as the Company's sole investment adviser.
On June 8, 1998, the Company paid a cash dividend of $10.75 per share to
stockholders of record on May 21, 1998. The Company currently estimates that
the sources of this dividend will be $.25 per share from net investment income
for the year ending December 31, 1998 and $10.50 per share from net long-term
capital gains realized during the year ending December 31, 1998. This dividend
was the annual distribution for the year 1998 under the Company's distribution
policy. Please refer to the Distribution Policy in this report.
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.
YEAR 2000 READINESS DISCLOSURE-- Like other investment companies and
financial and business organizations worldwide, the Company could be adversely
affected if computer systems on which the Company and its service providers
rely are unable to process correctly date-related information on and after
January 1, 2000. This risk is commonly called the Year 2000 issue. Failure to
address successfully the Year 2000 issue could result in interruptions in and
other adverse effects on the Company's business and operations. The Company
has commenced a review, both internally and as regards the Company's vendors,
of the Year 2000 issue as it may affect the Company. The Company is taking
steps it believes are reasonably designed to address the Year 2000 issue.
There can be no assurance that these steps will be sufficient. In addition,
there can be no assurance that the Year 2000 issue will not have an adverse
effect on the companies whose securities are held by the Company or on global
markets or economies generally.
<PAGE>
BERGSTROM CAPITAL CORPORATION
- -------------------------------------------------------------------------------
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, each Sunday in the New York Times, and each Monday in the Wall Street
Journal 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, 1998 (Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investments, at value (see accompanying schedule):
Short-term investments (cost $5,817,000) $ 5,817,000
Common stocks (cost $82,434,108) 153,106,889
------------
TOTAL INVESTMENTS (COST $88,251,108) 158,923,889
Cash 5,422
Interest and dividends receivable 104,315
Other assets 5,048
------------
TOTAL ASSETS 159,038,674
------------
LIABILITIES:
Advisory fee payable 64,986
Other accrued expenses 28,728
------------
TOTAL LIABILITIES 93,714
------------
NET ASSETS applicable to 1,001,100 outstanding
shares of capital stock equivalent to
$158.77 per share on September 30, 1998 $158,944,960
============
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
SEPTEMBER 30, YEAR ENDED
1998 DECEMBER 31,
(UNAUDITED) 1997
<S> <C> <C>
OPERATIONS:
Net investment income $ 190,680 $ 689,455
Realized gain on investments 22,023,880 26,273,386
Increase (decrease) in unrealized appreciation (7,248,292) 1,135,956
------------ ------------
Net increase in net assets resulting from
operations 14,966,268 28,098,797
------------ ------------
DIVIDENDS TO STOCKHOLDERS:
From net investment income (190,680) (689,455)
From net realized gain on investments (10,736,695) (8,607,845)
------------ ------------
Total dividends to stockholders ($10.75 per
share--1998; $8.50 per share--1997) (10,927,375) (9,297,300)
------------ ------------
COST OF SHARES OF BERGSTROM CAPITAL CORPORATION
STOCK REPURCHASED (27,300 SHARES--1998; 83,800
SHARES--1997) (3,988,754) (11,333,753)
------------ ------------
TOTAL INCREASE IN NET ASSETS 50,139 7,467,744
NET ASSETS, BEGINNING OF PERIOD 158,894,821 151,427,077
------------ ------------
NET ASSETS, END OF PERIOD $158,944,960 $158,894,821
============ ============
</TABLE>
See also Notes to Financial Statements in the Company's 1998 Semi-Annual Report
to Stockholders.
<PAGE>
BERGSTROM CAPITAL CORPORATION
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 (Unaudited)
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest $ 431,562
Dividends 714,657
-----------
TOTAL INCOME 1,146,219
-----------
EXPENSES:
Advisory fees 732,711
Legal fees 52,779
Auditing fees 50,473
Stockholders' meeting and reports 13,134
Transfer agent fees and expenses 23,486
Custodian fees 18,434
Directors' fees and expenses 33,609
Fee for shares listed on American Stock Exchange 5,250
State and other taxes 8,382
Other 17,281
-----------
TOTAL EXPENSES 955,539
-----------
NET INVESTMENT INCOME ($.19 PER SHARE) 190,680
-----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Realized gain on investments (excluding short-term
investments):
Proceeds from sale of securities $53,311,995
Cost of securities sold 31,288,115
-----------
Realized gain on investments sold 22,023,880
Unrealized appreciation of investments:
Beginning of period 77,921,073
End of period 70,672,781
-----------
Decrease in unrealized appreciation (7,248,292)
-----------
NET GAIN ON INVESTMENTS ($14.42 PER SHARE) 14,775,588
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $14,966,268
===========
</TABLE>
See also Notes to Financial Statements in the Company's 1998 Semi-Annual Report
to Stockholders.
<PAGE>
BERGSTROM CAPITAL CORPORATION
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
September 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
SHARES OR PRINCIPAL AMOUNT COST VALUE
<C> <S> <C> <C>
SHORT-TERM INVESTMENTS (3.7%):
$5,817,000 State Street Bank and Trust Company,
5.00%
Euro-Dollar Deposit due 10/01/98 $ 5,817,000 $ 5,817,000
---------- ----------- ------------
$5,817,000 TOTAL--SHORT-TERM INVESTMENTS 5,817,000 5,817,000
========== ----------- ------------
COMMON STOCKS (96.3%):
BANKS (3.7%):
48,000 Bank New York, Inc. 933,258 1,314,000
13,000 BankAmerica Corp. 1,157,941 781,625
6,000 Citicorp 746,120 557,625
21,000 North Fork Bancorporation, Inc. 559,499 420,000
17,000 Star Banc Corp. 1,042,947 1,124,125
48,000 U.S. Bancorp DEL 1,466,681 1,707,000
----------- ------------
5,906,446 5,904,375
----------- ------------
BEVERAGES (4.4%):
60,000 Coca Cola Enterprises, Inc. 810,797 1,515,000
77,500 Coca-Cola Co. 104,001 4,465,938
37,000 Pepsico, Inc. 1,408,417 1,089,187
----------- ------------
2,323,215 7,070,125
----------- ------------
BIOTECHNOLOGY (8.6%):
180,000 Amgen, Inc. (A) 940,410 13,601,250
----------- ------------
BUSINESS SERVICES (2.5%):
135,000 Huntingdon Life Sciences Group PLC ADR 741,765 160,312
35,000 IMS Health, Inc. (B) 1,045,889 2,167,813
70,000 Manpower, Inc. 1,127,696 1,430,625
16,666 Nielsen Media Research, Inc. (B) 117,531 170,826
----------- ------------
3,032,881 3,929,576
----------- ------------
CHEMICALS (1.3%):
29,000 Monsanto Co. 1,714,729 1,634,875
13,500 Zeneca Group PLC ADR 596,411 472,500
----------- ------------
2,311,140 2,107,375
----------- ------------
COMMUNICATION SYSTEMS (4.0%):
11,000 GTE Corp. 561,679 605,000
19,000 Intermedia Communications FLA, Inc. 482,476 466,688
84,000 MCI WorldCom, Inc. (C) 1,730,113 4,105,500
56,000 Nextel Communications, Inc. 914,015 1,130,500
----------- ------------
3,688,283 6,307,688
----------- ------------
</TABLE>
<PAGE>
BERGSTROM CAPITAL CORPORATION
- --------------------------------------------------------------------------------
SHARES OR PRINCIPAL AMOUNT
<TABLE>
<CAPTION>
COMMON STOCKS (UNAUDITED)--CONTINUED
COST VALUE
<C> <S> <C> <C>
COMPUTERS AND INFORMATION (1.3%):
15,000 Compaq Computer Corp. $ 534,610 $ 474,375
24,000 Dell Computer Corp. 671,410 1,578,000
----------- -----------
1,206,020 2,052,375
----------- -----------
DIVERSIFIED TECHNOLOGY (1.2%):
25,000 Nokia Corp. Sponsored ADR 450,507 1,960,937
----------- -----------
DRUGS AND HEALTH SUPPLIES (5.6%):
20,000 Bausch & Lomb, Inc. 1,003,644 787,500
18,000 Boston Scientific Corp. 798,180 924,750
13,000 Johnson & Johnson 619,376 1,017,250
14,000 Medtronic, Inc. 568,884 810,250
37,000 Pfizer, Inc. 1,791,096 3,919,688
25,000 Smithkline Beecham PLC ADR 414,540 1,368,750
----------- -----------
5,195,720 8,828,188
----------- -----------
ELECTRICAL COMPONENTS (1.4%):
28,000 General Electric Co. 1,211,090 2,227,750
----------- -----------
ELECTRONICS/NEW TECHNOLOGY (4.3%):
40,500 Cisco Systems, Inc. 1,322,839 2,503,406
18,000 EMC Corp. Mass 828,617 1,029,375
20,000 Intel Corp. 1,031,663 1,715,000
15,000 Lucent Technologies, Inc. 341,565 1,035,938
9,000 Perkin-Elmer Corp. 555,005 618,187
----------- -----------
4,079,689 6,901,906
----------- -----------
FINANCIAL SERVICES, DIVERSIFIED (1.8%):
18,000 Federal National Mortgage Association 440,845 1,156,500
22,000 Travelers Group, Inc. 1,182,188 825,000
28,500 Washington Mutual, Inc. 1,203,416 961,875
----------- -----------
2,826,449 2,943,375
----------- -----------
FOOD PROCESSING (0.5%):
30,000 Pioneer Hi-Bred International, Inc. 616,320 796,875
----------- -----------
HARDWARE AND TOOLS (0.4%):
20,000 Snap-On, Inc. 585,650 616,250
----------- -----------
</TABLE>
<PAGE>
BERGSTROM CAPITAL CORPORATION
- --------------------------------------------------------------------------------
SHARES OR PRINCIPAL AMOUNT
<TABLE>
<CAPTION>
COMMON STOCKS (UNAUDITED)--CONTINUED
COST VALUE
<C> <S> <C> <C>
HEALTH CARE SERVICES (1.1%):
12,000 Bergen Brunswig Corp. $ 501,379 $ 606,750
11,000 Cardinal Health, Inc. 832,822 1,135,750
----------- ----------
1,334,201 1,742,500
----------- ----------
HOUSEHOLD PRODUCTS (NON-DURABLE) (2.4%):
34,000 Gillette Co. 1,626,142 1,300,500
24,000 Proctor & Gamble Co. 572,220 1,702,500
11,000 Revlon, Inc. 572,591 349,938
5,000 The Clorox Co. 476,082 412,500
----------- ----------
3,247,035 3,765,438
----------- ----------
INDUSTRIAL MACHINERY (3.6%):
104,000 Tyco International Ltd. New 2,159,614 5,746,000
----------- ----------
INSURANCE (2.3%):
38,980 American International Group, Inc. 490,844 3,001,460
24,000 Liberty Financial Companies 840,637 633,000
----------- ----------
1,331,481 3,634,460
----------- ----------
LODGING (0.7%):
40,000 Marriott International, Inc. Class A 497,055 955,000
5,000 Sodexho Marriott Services, Inc. 43,057 150,000
----------- ----------
540,112 1,105,000
----------- ----------
MEDIA (1.8%):
45,000 Disney (Walt) Co. 560,460 1,139,063
26,000 Gartner Group, Inc. New Cl. A 683,312 542,750
34,000 General Motors Hughes Electronics Class H 1,276,356 1,251,625
----------- ----------
2,520,128 2,933,438
----------- ----------
MEDICAL SUPPLIES (6.3%):
25,800 Abbott Laboratories 452,270 1,120,687
36,000 Alza Corp. 1,430,971 1,561,500
26,000 American Home Products Corp. 1,204,311 1,361,750
100,000 Baxter International, Inc. 880,840 5,950,000
----------- ----------
3,968,392 9,993,937
----------- ----------
OFFICE EQUIPMENT (0.8%):
15,000 Xerox Corp. 1,621,706 1,271,250
----------- ----------
</TABLE>
<PAGE>
BERGSTROM CAPITAL CORPORATION
- --------------------------------------------------------------------------------
SHARES OR PRINCIPAL AMOUNT
<TABLE>
<CAPTION>
COMMON STOCKS (UNAUDITED)--CONTINUED
COST VALUE
<C> <S> <C> <C>
PHARMACEUTICALS (10.0%):
16,000 Bristol-Myers Squibb Co. $ 215,411 $ 1,662,000
54,000 Lilly Eli & Co. 1,545,624 4,228,875
28,000 Schering-Plough Corp. 487,839 2,899,750
19,000 Sofamor/Danek Group, Inc. 1,331,098 1,691,000
72,000 Warner Lambert Co. 2,277,849 5,436,000
----------- -----------
5,857,821 15,917,625
----------- -----------
REGULATED INVESTMENT COMPANIES (6.4%):
670,000 Dresdner RCM Growth Equity Fund, Inc. 4,138,453 3,798,900
158,769 Dresdner RCM International Growth Equity
Fund A 2,063,870 2,144,972
360,000 Dresdner RCM Small Cap Fund 4,104,054 3,391,200
50,000 Latin America Smaller Companies Fund, Inc. 528,218 240,625
70,000 Latin America Investment Fund 1,168,662 551,250
----------- -----------
12,003,257 10,126,947
----------- -----------
RESTAURANTS (3.0%):
49,000 Host Marriott Corp. 659,620 621,687
70,000 McDonalds Corp. 2,850,156 4,178,125
----------- -----------
3,509,776 4,799,812
----------- -----------
RETAIL TRADE (4.6%):
58,000 Bed Bath & Beyond, Inc. 757,687 1,355,750
20,000 CVS Corporation 381,438 876,250
32,000 Dayton Hudson Corp. 1,503,556 1,144,000
34,000 Family Dollar Stores, Inc. 480,811 535,500
30,000 Home Depot, Inc. 943,546 1,185,000
34,000 Nordstrom, Inc. 1,064,960 841,500
17,000 Office Depot, Inc. 550,424 381,437
22,000 Safeway, Inc. 657,405 1,014,750
----------- -----------
6,339,827 7,334,187
----------- -----------
SOFTWARE AND PROCESSING (12.3%):
20,000 America Online, Inc. 556,456 2,225,000
11,000 Automatic Data Processing, Inc. 241,307 822,250
500,000 Boole & Babbage, Inc. (A) 161,913 11,625,000
30,000 Microsoft Corp. (A) 791,038 3,301,875
16,000 Network Associates, Inc. 681,586 568,000
29,000 Peoplesoft, Inc. 1,194,638 946,125
----------- -----------
3,626,938 19,488,250
----------- -----------
</TABLE>
<PAGE>
BERGSTROM CAPITAL CORPORATION
- -------------------------------------------------------------------------------
SHARES OR PRINCIPAL AMOUNT
<TABLE>
<CAPTION>
COMMON STOCKS
(UNAUDITED)--
CONTINUED
COST VALUE
<C> <S> <C> <C>
TOTALS--COMMON STOCKS $82,434,108 $153,106,889
----------- ------------
TOTALS--INVESTMENTS $88,251,108 $158,923,889
=========== ============
</TABLE>
(A) Non-income producing securities.
(B) Holders of common stock of Cognizant Corporation received, for each share
of Cognizant Corporation, a distribution of one share of IMS Health, Inc.
common stock. The name of Cognizant Corporation was changed to Nielsen
Media Research, Inc. A portion of the basis of the Nielsen Media
Research, Inc. (formerly Cognizant Corporation) stock was allocated to
the IMS Health, Inc. stock. Subsequently, there was a 1 for 3 reverse
stock split of the Nielsen Media Research, Inc. stock, and subsequently
15,000 shares of IMS Health, Inc. stock were sold.
(C) The name of Worldcom, Inc. GA was changed to MCI WorldCom, Inc. after its
merger with MCI Communications Corporation.
See Also Notes to Financial Statements in the Company's 1998 Semi-Annual
Report to Stockholders.
<PAGE>
- --------------------------------------------------------------------------------
BOARD OF DIRECTORS
ERIK E. BERGSTROM GEORGE COLE SCOTT
Chairman Registered Representative
Anderson & Strudwick Incorporated
WILLIAM L. McQUEEN President
President and Treasurer Closed-End Fund Advisors, Inc.
NORMAN R. NIELSEN
Manager and Senior WILLIAM H. SPERBER
Member of Research Staff Chairman, President and Chief Executive Officer
SRI International The Trust Company of Washington
OFFICERS
WILLIAM L. McQUEEN PAMELA A. FIORINI
President and Treasurer Secretary
ELIZABETH C. HEDLUND
Assistant Secretary
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BERGSTROM CAPITAL CORPORATION
505 Madison Street, Suite 220
Seattle, Washington 98104
(206) 623-7302
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