<PAGE>
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BERGSTROM
CAPITAL
CORPORATION
----------------------------------
2000 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
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<PAGE>
BERGSTROM CAPITAL CORPORATION
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STOCKHOLDER MEETING RESULTS
The Annual Meeting of Stockholders of Bergstrom Capital Corporation (the
"Company") was held on Monday, November 6, 2000 in the Kirkland Cutter Room,
The Rainier Club, 820 Fourth Avenue, Seattle, Washington. The two matters
voted upon by stockholders and the resulting votes for each matter are
presented below.
1. To elect two directors to hold office until the Annual Meeting of
Stockholders in 2003 and until their successors shall be elected and
shall qualify.
<TABLE>
<CAPTION>
Elected Director For Withheld Broker Non-Votes*
<S> <C> <C> <C> <C>
Erik E. Bergstrom 892,931 2,606 0
George C. Scott 892,658 2,879 0
<CAPTION>
Other Continuing Directors Present Term Expires
<S> <C> <C> <C> <C>
William L. McQueen 2002
Norman R. Nielsen 2002
William H. Sperber 2001
</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, 2000.
<TABLE>
<CAPTION>
For Against Abstain Broker Non-Votes*
<S> <C> <C> <C> <C>
891,627 1,492 2,418 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
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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.
Please refer to the President's Letter in this report regarding the annual
distribution for the year 2000 in the amount of $17.75 per share, paid on June
5, 2000 to stockholders of record on May 18, 2000.
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 2000.
<PAGE>
BERGSTROM CAPITAL CORPORATION
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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 1999, 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, 2000 as a part
of the $17.75 per share cash dividend paid on June 5, 2000, and to retain the
remainder of the net long-term capital gains realized during the year ending
December 31, 2000.
A Form 1099 will be mailed by January 31, 2001 to all stockholders of record
on the dividend record date in 2000 setting forth the specific amounts to be
included in their 2000 tax returns.
<PAGE>
BERGSTROM CAPITAL CORPORATION
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221 First Avenue West, Suite 320
Seattle, Washington 98119-4224
November 6, 2000
Dear Fellow Stockholders:
During the first nine months of 2000 the Company's net assets decreased from
$276,737,285 to $268,482,675 which is a decrease of $8,254,610. This decrease
in net assets is after payment by the Company of $17,750,000 in dividends
($17.75 per share on June 5, 2000). The increase in net assets, before
deducting the payment of dividends, was composed of net investment income of
$33,805, realized gain on investments of $40,650,157, and a decrease in
unrealized appreciation of $31,188,572.
The per share net asset value decreased from $276.74 on December 31, 1999 to
$268.48 on September 30, 2000. After adjustment for the dividends, the per
share net asset value increased 3.4%. During the same period the Dow Jones
Industrial Average, adjusted for dividends, decreased 6.29% and the Standard &
Poor's 500 Stock Average, adjusted for dividends, decreased 1.39%. The per
share net asset value on Friday, November 3, 2000 was $258.22.
During the first nine months of 2000 the Company had total interest and
dividend income of $1,023,669 as compared to $911,029 for the same period in
1999 for an increase of $112,640. During the first nine months of 2000
operating expenses were $989,864 which is a $143,464 increase from $846,400
for the first nine months of 1999. The resulting net investment income of
$33,805 for the first nine months of 2000 is a decrease of $30,824 from
$64,629 for the first nine months of 1999.
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 2000:
<PAGE>
BERGSTROM CAPITAL CORPORATION
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<TABLE>
<CAPTION>
SHARES
--------------------------------------
HELD
SEPTEMBER 30,
SECURITY NAME ADDITIONS REDUCTIONS 2000
----------------------------------------- --------- ---------- -------------
<S> <C> <C> <C>
ACE Ltd. ................................ 42,600 42,600
Bell Atlantic Corp. ..................... 18,000(1) 0
Clear Channel Communications, Inc. ...... 26,000 29,000
Ericcson LM Tel Co. Sponsored ADR........ 125,000 0
Gap, Inc. ............................... 20,000 20,000 0
GTE Corp. ............................... 54,000(1) 0
JDS Uniphase Corp. ...................... 31,000 20,000
Johnson & Johnson........................ 20,000 0
Juniper Networks, Inc. .................. 7,500 7,500
Kohls Corp. ............................. 40,000 0
McDonalds Corp. ......................... 46,000 0
Nike, Inc. Class B....................... 25,000 25,000
Nokia Corp Sponsored ADR................. 51,000 119,000
Nortel Networks Corp. ................... 13,000 43,000
Pfizer, Inc. ............................ 91,250 289,000
SDL, Inc. ............................... 14,000 14,000
Sepracor, Inc. .......................... 2,500 6,700 11,800
Siebel Systems, Inc. .................... 21,000 29,000
Texas Instruments, Inc. ................. 14,000 0
Tyco International Ltd. ................. 16,000 144,000
Tycom Ltd. .............................. 34,000 34,000
United Parcel Service Class B............ 12,500 12,500 0
Verizon Communications................... 83,880(1) 83,880(1) 0
Xilinx, Inc. ............................ 14,000 14,000
Yahoo, Inc. ............................. 26,200 1,800
</TABLE>
-------
(1) Received 65,880 shares of Verizon Communications in exchange for 54,000
shares of GTE Corp. and then received 18,000 shares of Verizon
Communications in exchange for 18,000 shares of Bell Atlantic Corp. and
then sold 83,880 shares of Verizon Communications.
<PAGE>
BERGSTROM CAPITAL CORPORATION
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The value of the Company's investment in the securities of Amgen, Inc.
amounted to 16.0% of the Company's total assets at September 30, 2000. 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.
On June 5, 2000, the Company paid a cash dividend of $17.75 per share to
stockholders of record on May 18, 2000. The Company currently estimates that
the sources of this dividend will be $.04 per share from net investment income
for the year ending December 31, 2000, $12.84 per share from net short-term
capital gains realized during the year ending December 31, 2000 and $4.87 per
share from net long-term capital gains realized during the year ending
December 31, 2000. This dividend was the annual distribution for the year 2000
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.
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." This
information is also available on the Internet on a daily basis through a
variety of sources. The Company is not responsible for inaccuracies or
omissions in the dissemination of this information.
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
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STATEMENT OF ASSETS AND LIABILITIES
September 30, 2000 (Unaudited)
<TABLE>
<S> <C>
Assets:
Investments, at value (see accompanying schedule):
Short-term investments (cost $9,961,312) $ 9,961,312
Common stocks (cost $116,344,045) 258,899,643
------------
Total Investments (cost $126,305,357) 268,860,955
Cash 5,000
Receivable for securities sold 1,433,135
Interest and dividends receivable 94,564
Other assets 1,625
------------
Total assets 270,395,279
------------
Liabilities:
Advisory fee payable 195,472
Payable for securities purchased 1,677,556
Other accrued expenses 39,576
------------
Total liabilities 1,912,604
------------
Net assets applicable to 1,000,000 outstanding shares of
capital stock equivalent to $268.48 per share on September
30, 2000 $268,482,675
============
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
NINE MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 2000 DECEMBER 31,
(Unaudited) 1999
<S> <C> <C>
Operations:
Net investment income $ 33,805 $ 110,760
Realized gain on investments 40,650,157 34,283,577
Increase (decrease) in unrealized appreciation (31,188,572) 55,510,069
------------ ------------
Net increase in net assets resulting from
operations 9,495,390 89,904,406
------------ ------------
Dividends to stockholders:
From net investment income (33,805) (110,760)
From net realized gain on investments (17,716,195) (13,389,240)
------------ ------------
Total dividends to stockholders ($17.75 per
share--2000; $13.50 per share--1999) (17,750,000) (13,500,000)
------------ ------------
Total increase (decrease) in net assets (8,254,610) 76,404,406
Net assets, beginning of period 276,737,285 200,332,879
------------ ------------
Net assets, end of period $268,482,675 $276,737,285
============ ============
</TABLE>
See also Notes to Financial Statements in the Company's 2000 Semi-Annual Report
to Stockholders.
<PAGE>
BERGSTROM CAPITAL CORPORATION
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STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 (Unaudited)
<TABLE>
<S> <C> <C>
Investment Income:
Interest $ 205,697
Dividends 817,972
------------
Total income 1,023,669
------------
Expenses:
Advisory fees 613,632
Directors' fees and expenses 66,256
Officer's salary and related expenses 63,464
Accounting expenses 50,518
Auditing fees 48,500
Legal fees 47,042
Transfer agent fees and expenses 25,648
Custodian fees 21,543
Other expenses 19,880
State and other taxes 14,487
Stockholders' meeting and reports 14,019
Fee for shares listed on American Stock Exchange 4,875
------------
Total expenses 989,864
------------
Net investment income ($.03 per share) 33,805
------------
Realized and unrealized gain on investments:
Realized gain on investments (excluding short-term
investments):
Proceeds from sale of securities $ 95,466,455
Cost of securities sold 54,816,298
------------
Realized gain on investments sold 40,650,157
Unrealized appreciation of investments:
Beginning of period 173,744,170
End of period 142,555,598
------------
Decrease in unrealized appreciation (31,188,572)
------------
Net gain on investments ($9.46 per share) 9,461,585
------------
Net increase in net assets resulting from
operations $ 9,495,390
============
</TABLE>
See also Notes to Financial Statements in the Company's 2000 Semi-Annual Report
to Stockholders.
<PAGE>
BERGSTROM CAPITAL CORPORATION
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SCHEDULE OF INVESTMENTS
September 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares or
Principal
Amount Cost Value
<C> <S> <C> <C>
Short-Term Investments (3.7%):
$9,961,312 State Street Bank and Trust Company, 5.0%
Euro-Dollar Deposit Due 10/1/00 $ 9,961,312 $ 9,961,312
---------- ----------- -----------
$9,961,312 Total--Short-Term Investments 9,961,312 9,961,312
========== ----------- -----------
Common Stocks (96.3%):
Banks (2.5%):
52,000 Bank New York, Inc. 1,065,418 2,915,250
70,000 Citigroup, Inc. 1,433,940 3,784,375
----------- -----------
2,499,358 6,699,625
----------- -----------
Beverages (1.4%):
67,500 Coca-Cola Co. 90,276 3,720,938
----------- -----------
Biotechnology (16.2%):
620,000 Amgen, Inc. (A) 809,797 43,293,438
----------- -----------
Broadcasting (0.6%):
29,000 Clear Channel Communications, Inc. (A) 1,527,838 1,638,500
----------- -----------
Communication Systems (6.3%):
53,000 Nextel Communications, Inc. (A) 367,050 2,477,750
85,000 Qwest Communications International, Inc.
(A) 3,423,176 4,085,312
76,000 SBC Communications, Inc. 3,484,269 3,800,000
34,000 Tycom Ltd. (A) 1,189,081 1,304,750
43,000 Vodafone Airtouch PLC Sponsored ADR 1,843,264 1,591,000
122,000 WorldCom, Inc. (A) 1,638,146 3,705,750
----------- -----------
11,944,986 16,964,562
----------- -----------
Computers and Information (1.0%):
29,000 Hewlett-Packard Co. 2,073,920 2,813,000
----------- -----------
Diversified Technology (1.8%):
119,000 Nokia Corp. Sponsored ADR 262,572 4,737,687
----------- -----------
Drugs and Health Supplies (4.8%):
289,000 Pfizer, Inc. 6,135,770 12,986,937
----------- -----------
</TABLE>
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BERGSTROM CAPITAL CORPORATION
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<TABLE>
<CAPTION>
Shares or
Principal Common Stocks (Unaudited)--
Amount Continued Cost Value
<C> <S> <C> <C>
Electrical Components (3.5%):
165,000 General Electric Co. $ 4,571,182 $ 9,518,437
----------- -----------
Electronics/New Technology (16.9%):
162,000 Cisco Systems, Inc. (A) 1,322,839 8,950,500
5,000 Corning, Inc. 1,044,953 1,485,000
126,000 EMC Corp. Mass (A) 2,020,583 12,489,750
80,000 Intel Corp. 1,954,028 3,325,000
20,000 JDS Uniphase Corp. (A) 411,322 1,893,750
7,500 Juniper Networks, Inc. (A) 1,238,673 1,642,031
43,000 Nortel Networks Corp. 1,707,274 2,561,188
37,000 Qualcomm, Inc. (A) 627,484 2,636,250
14,000 SDL, Inc. (A) 4,898,144 4,330,375
22,000 STMicroelectronics N V (A) 1,339,250 1,047,750
34,000 Sun Microsystems, Inc. (A) 2,900,701 3,969,500
14,000 Xilinx, Inc. (A) 1,172,933 1,198,750
----------- -----------
20,638,184 45,529,844
----------- -----------
Industrial Machinery (2.8%):
144,000 Tyco International Ltd. New 1,597,687 7,470,000
----------- -----------
Insurance (4.1%):
42,600 ACE Ltd. 1,677,556 1,672,050
65,625 American International Group, Inc. 440,727 6,279,492
23,500 Marsh & McLennan Companies, Inc. 1,854,663 3,119,625
----------- -----------
3,972,946 11,071,167
----------- -----------
Petroleum Services (0.9%):
31,000 Schlumberger Ltd. 2,006,608 2,551,688
----------- -----------
Pharmaceuticals (7.6%):
32,000 Bristol-Myers Squibb Co. 215,411 1,828,000
3,900 Genentech, Inc. (A) 623,795 724,181
44,000 Glaxo Wellcome PLC Sponsored ADR 2,366,952 2,659,250
4,200 Human Genome Sciences, Inc. (A) 581,059 727,125
44,000 Lilly Eli & Co. 862,839 3,569,500
42,000 Merck & Co., Inc. 3,256,625 3,126,375
4,500 Millennium Pharmaceuticals, Inc. (A) 530,979 657,281
32,000 PE Corp.-PE Biosystems Group 1,762,798 3,728,000
31,000 Pharmacia Corp. 1,567,050 1,865,813
11,800 Sepracor, Inc. (A) 366,833 1,447,713
----------- -----------
12,134,341 20,333,238
----------- -----------
</TABLE>
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BERGSTROM CAPITAL CORPORATION
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<TABLE>
<CAPTION>
Shares or
Principal
Amount Common Stocks (Unaudited)--Continued Cost Value
<C> <S> <C> <C>
Publishing (0.6%):
20,000 Time Warner, Inc. $ 1,237,508 $ 1,565,000
------------ ------------
Regulated Investment Companies (8.9%):
81,132 Dresdner RCM Global Technology Fund (B) 4,300,000 6,278,000
421,159 Dresdner RCM International Growth Equity
Fund (B) 7,245,946 7,336,586
955,399 Dresdner RCM MidCap Fund, Inc. (B) 5,340,475 10,346,971
------------ ------------
16,886,421 23,961,557
------------ ------------
Retail Trade (6.5%):
58,000 Colgate Palmolive Co. 2,255,863 2,737,600
54,000 Costco Companies, Inc. (A) 1,538,785 1,886,625
45,000 Home Depot, Inc. 943,546 2,387,812
25,000 Nike, Inc., Class B 1,042,480 1,001,563
37,000 Safeway, Inc. (A) 1,335,330 1,727,438
46,000 Target Corp. 1,177,430 1,178,750
71,000 Walgreen Co. 1,942,063 2,693,562
80,000 Wal-Mart Stores, Inc. 3,416,305 3,850,000
------------ ------------
13,651,802 17,463,350
------------ ------------
Software and Processing (7.9%):
9,500 Check Point Software Technologies, Ltd.
(A) 847,445 1,496,250
105,000 Microsoft Corp. (A) 4,327,819 6,332,813
51,000 Oracle Corp. (A) 3,685,051 4,016,250
29,000 Siebel Systems, Inc. (A) 2,313,172 3,228,062
41,625 Veritas Software Co. (A) 1,017,500 5,910,750
1,800 Yahoo, Inc. (A) 123,749 163,800
------------ ------------
12,314,736 21,147,925
------------ ------------
Utilities (2.0%):
62,000 Enron Corp. 1,988,113 5,432,750
------------ ------------
Totals--Common Stocks 116,344,045 258,899,643
------------ ------------
Totals--Investments $126,305,357 $268,860,955
============ ============
</TABLE>
(A) Non-income producing securities.
(B) Regulated investment company advised by Dresdner RCM Global Investors LLC,
the Corporation's investment adviser.
See also Notes to Financial Statements in the Company's 2000 Semi-Annual
Report to Stockholders.
<PAGE>
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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 WILLIAM H. SPERBER
Manager and Senior Member Retired Chairman and Chief Executive Officer
of Research Staff The Trust Company of Washington
AtomicTangerine (an affiliate
of SRI International)
OFFICERS
WILLIAM L. McQUEEN SUZANNE M. SCHIFFLER
President and Treasurer Secretary
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BERGSTROM CAPITAL CORPORATION
221 First Avenue West, Suite 320
Seattle, Washington 98119-4224
(206) 283-0539
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