<PAGE>
--------------------------------------------------------------------------------
----------------------------------
BERGSTROM
CAPITAL
CORPORATION
----------------------------------
2000 SEMI-ANNUAL 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
-------------------------------------------------------------------------------
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.
<PAGE>
BERGSTROM CAPITAL CORPORATION
-------------------------------------------------------------------------------
221 First Avenue West, Suite 320
Seattle, Washington 98119-4224
August 14, 2000
Dear Fellow Stockholders:
During the first half of 2000 the Company's net assets decreased from
$276,737,285 to $269,387,032 which is a decrease of $7,350,253. 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
$29,553, realized gain on investments of $32,531,988, and a decrease in
unrealized appreciation of $22,161,794.
The per share net asset value decreased from $276.74 on December 31, 1999 to
$269.39 on June 30, 2000. After adjustment for the dividends, the per share
net asset value increased 3.8%. During the same period the Dow Jones
Industrial Average, adjusted for dividends, decreased 8.4% and the Standard &
Poor's 500 Stock Average, adjusted for dividends, decreased .4%. The per share
net asset value on Friday, August 11, 2000 was $268.64.
During the first six months of 2000 the Company had total interest and
dividend income of $700,593 as compared to $596,937 for the same period in
1999 for an increase of $103,656. During the first six months of 2000
operating expenses were $671,040 which is a $111,139 increase from $559,901
for the first six months of 1999. The resulting net investment income of
$29,553 for the first six months of 2000 is a decrease of $7,483 from $37,036
for the first six 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 second quarter of 2000:
<PAGE>
BERGSTROM CAPITAL CORPORATION
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES
---------------------------------
HELD
JUNE 30,
SECURITY NAME ADDITIONS REDUCTIONS 2000
---------------------------------------------- --------- ---------- --------
<S> <C> <C> <C>
Agilent Technologies, Inc..................... 11,060(1) 11,060(1) 0
Alcoa, Inc.................................... 33,000 0
Amgen, Inc.................................... 10,000 620,000
Applied Materials, Inc........................ 26,000 0
Baxter International, Inc..................... 65,000 0
Bell Atlantic Corp............................ 19,000 18,000
BMC Software, Inc............................. 39,300 0
Check Point Software Technologies, Ltd........ 6,000 6,000
Circuit City Stores........................... 30,800 0
Clear Channel Communications, Inc............. 14,000 55,000
Coca Cola Enterprises, Inc.................... 60,000 0
Conoco, Inc................................... 118,000 0
Corning, Inc.................................. 5,000 5,000
Costco Companies, Inc......................... 14,000 54,000
Ericcson LM Tel Co. Sponsored ADR............. 125,000 125,000
Genentech, Inc................................ 3,900 3,900
Glaxo Wellcome PLC Sponsored ADR.............. 17,000 44,000
Guidant Corp.................................. 21,500 0
Human Genome Sciences, Inc.................... 4,200 4,200
Intel Corp.................................... 10,000 40,000
JDS Uniphase Corp............................. 41,000 51,000
McDonalds Corp................................ 54,000 46,000
Millennium Pharmaceuticals, Inc............... 4,500 4,500
Motorola, Inc................................. 20,000 0
Nokia Corp Sponsored ADR...................... 135,000(2) 10,000(2) 170,000
Oracle Corp................................... 16,000 51,000
Pfizer, Inc................................... 134,750(3) 197,750
Pharmacia Corp................................ 31,000 31,000
Procter & Gamble Co........................... 10,000 0
Qualcomm, Inc................................. 18,000 37,000
SBC Communications, Inc....................... 53,000 76,000
Schering-Plough Corp.......................... 46,000 0
Schlumberger Ltd.............................. 13,000 31,000
Siebel Systems Inc............................ 8,000 8,000
STMicroelectronics N V........................ 22,000 22,000
Sun Microsystems, Inc......................... 16,000 34,000
Tyco International Ltd........................ 17,600 160,000
Vodafone Airtouch PLC Sponsored ADR........... 10,500 43,000
Warner Lambert Co............................. 9,000(3) 49,000(3) 0
Yahoo, Inc.................................... 14,000 28,000
</TABLE>
-------
(1) Received 11,060 shares of Agilent Technologies, Inc. as a distribution
from Hewlett-Packard Co. and then sold 11,060 shares of Agilent
Technologies, Inc.
(2) Received 135,000 as a stock split and then sold 10,000 shares.
(3) Purchased 9,000 shares of Warner Lambert Co. and then exchanged 49,000 of
Warner Lambert Co. for 134,750 shares of Pfizer, Inc. as a result of a
merger.
<PAGE>
BERGSTROM CAPITAL CORPORATION
-------------------------------------------------------------------------------
The value of the Company's investment in the securities of Amgen, Inc.
amounted to 15.7% of the Company's total assets at June 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 $.06 per share from net investment income
for the year ending December 31, 2000, $13.56 per share from net short-term
capital gains realized during the year ending December 31, 2000 and $4.13 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
--------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000 (Unaudited)
<TABLE>
<S> <C>
Assets:
Investments, at value (see accompanying schedule)(Note 1):
Short-term investments (cost $1,438,848) $ 1,438,848
Common stocks (cost $116,978,033) 268,560,409
------------
Total Investments (cost $118,416,881) 269,999,257
Cash 5,000
Receivable for securities sold 8,165,223
Interest and dividends receivable 77,845
Other assets 5,133
------------
Total assets 278,252,458
------------
Liabilities:
Advisory fee payable (Note 5) 196,429
Payable for securities purchased 8,612,287
Other accrued expenses 56,710
------------
Total liabilities 8,865,426
------------
Net assets applicable to 1,000,000 outstanding shares of
capital stock equivalent to $269.39 per share on June 30,
2000 (Note 3) $269,387,032
============
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
JUNE 30, 2000 DECEMBER 31,
(Unaudited) 1999
<S> <C> <C>
Operations:
Net investment income $ 29,553 $ 110,760
Realized gain on investments 32,531,988 34,283,577
Increase (decrease) in unrealized appreciation (22,161,794) 55,510,069
------------ ------------
Net increase in net assets resulting from
operations 10,399,747 89,904,406
------------ ------------
Dividends to stockholders:
From net investment income (29,553) (110,760)
From net realized gain on investments (17,720,447) (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 (7,350,253) 76,404,406
Net assets, beginning of period 276,737,285 200,332,879
------------ ------------
Net assets, end of period $269,387,032 $276,737,285
============ ============
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
BERGSTROM CAPITAL CORPORATION
--------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2000 (Unaudited)
<TABLE>
<S> <C> <C>
Investment Income:
Interest $ 138,170
Dividends 562,423
------------
Total income 700,593
------------
Expenses:
Advisory fees (Note 5) 418,104
Officer's salary and related expenses (Note 5) 42,281
Directors' fees and expenses (Note 6) 41,789
Auditing fees 38,500
Accounting expenses 33,649
Legal fees 25,677
Transfer agent fees and expenses 19,218
Custodian fees 15,295
Other expenses 14,153
State and other taxes 10,543
Stockholders' meeting and reports 8,581
Fee for shares listed on American Stock Exchange 3,250
------------
Total expenses 671,040
------------
Net investment income ($.03 per share) (Note 2) 29,553
------------
Realized and unrealized gain on investments:
Realized gain on investments (excluding short-
term investments):
Proceeds from sale of securities $ 68,334,064
Cost of securities sold 35,802,076
------------
Realized gain on investments sold (Notes 2 and
4) 32,531,988
Unrealized appreciation of investments:
Beginning of period 173,744,170
End of period 151,582,376
------------
Decrease in unrealized appreciation (22,161,794)
------------
Net gain on investments ($10.37 per share) (Note
2) 10,370,194
------------
Net increase in net assets resulting from
operations $ 10,399,747
============
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
BERGSTROM CAPITAL CORPORATION
-------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
There are set forth below income and capital changes per share of capital
stock of the Corporation outstanding throughout each period, market value per
share at the end of each period, total investment returns for each period, and
certain ratios and other supplemental data for each period.
The total investment returns shown below are a record of the past and should
not be regarded as a representation of future results.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEARS ENDED DECEMBER 31
JUNE 30, 2000 -------------------------------------------
(Unaudited) 1999 1998 1997 1996 1995
------------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at
beginning of period $276.74 $200.33 $154.51 $136.15 $128.35 $ 94.56
Net investment income
(1) .03 .11 .16 .64 .57 .99
Net realized and
unrealized gain on
investments 10.37 89.80 55.99 24.79 13.51 37.16
Dividends from:
Net investment income
(2) (.03) (.11) (.16) (.63) (.58) (1.01)
Net realized gain on
investments (17.72) (13.39) (10.59) (7.87) (6.33) (3.99)
------- ------- ------- ------- ------- -------
Total dividends (17.75) (13.50) (10.75) (8.50) (6.91) (5.00)
------- ------- ------- ------- ------- -------
Increase due to
repurchase of
Bergstrom stock
at less than net asset
value -- -- .42 1.43 .63 .64
------- ------- ------- ------- ------- -------
Net asset value at end
of period $269.39 $276.74 $200.33 $154.51 $136.15 $128.35
======= ======= ======= ======= ======= =======
Market value per share
at end of period $256.00 $236.00 $171.00 $142.50 $119.00 $109.50
======= ======= ======= ======= ======= =======
Total investment
returns:
Based on market value
per share (3) 16.4%* 55.0% 32.1% 37.0% 15.6% 38.1%
Based on net asset
value per share (4) 3.8%* 50.5% 38.5% 26.5% 14.0% 43.5%
Net assets at end of
period (in millions) $ 269 $ 277 $ 200 $ 159 $ 151 $ 149
Ratio of expenses to
average net assets .25%* .53% .74% .75% .76% .82%
Ratio of net investment
income to average net
assets .01%* .05% .09% .43% .43% .88%
Portfolio turnover rate 17.81%* 40.57% 44.31% 34.07% 31.80% 29.69%
Number of shares
outstanding at end of
period (in thousands) 1,000 1,000 1,000 1,028 1,112 1,164
</TABLE>
(1) Based on weighted average number of shares outstanding.
(2) Based on number of shares outstanding on record date.
(3) Based on market value per share adjusted for reinvestment of dividends and
distributions of the federal income tax on net long-term capital gains
retained, which tax was paid on behalf of the Corporation's stockholders.
(4) Based on net asset value per share adjusted for reinvestment of dividends
and distributions of the federal income tax on net long-term capital gains
retained, which tax was paid on behalf of the Corporation's stockholders.
* Not Annualized.
See accompanying Notes to Financial Statements.
<PAGE>
BERGSTROM CAPITAL CORPORATION
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares or
Principal
Amount Cost Value
<C> <S> <C> <C>
Short-Term Investments (0.5%):
$1,438,848 State Street Bank and Trust Company, 5.0%
Euro-Dollar Deposit Due 7/1/00 $ 1,438,848 $ 1,438,848
---------- ----------- -----------
$1,438,848 Total--Short-Term Investments 1,438,848 1,438,848
========== ----------- -----------
Common Stocks (99.5%):
Banks (2.1%):
52,000 Bank New York, Inc. 1,065,418 2,418,000
52,500 Citigroup, Inc. 1,433,940 3,163,125
----------- -----------
2,499,358 5,581,125
----------- -----------
Beverages (1.4%):
67,500 Coca-Cola Co. 90,276 3,877,031
----------- -----------
Biotechnology (16.2%):
620,000 Amgen, Inc. (A) 809,797 43,555,000
----------- -----------
Broadcasting (1.5%):
55,000 Clear Channel Communications, Inc. (A) 3,011,336 4,125,000
----------- -----------
Communication Systems (9.2%):
18,000 Bell Atlantic Corp. 1,029,039 914,625
125,000 Ericcson L M Tel Co. Sponsored ADR 2,712,303 2,500,000
54,000 GTE Corp. 3,660,857 3,361,500
53,000 Nextel Communications, Inc. (A) 367,050 3,242,938
85,000 Qwest Communications International, Inc.
(A) 3,423,176 4,223,437
76,000 SBC Communications, Inc. 3,484,269 3,287,000
43,000 Vodafone Airtouch PLC Sponsored ADR 1,843,264 1,781,813
122,000 WorldCom, Inc. (A) 1,638,146 5,596,750
----------- -----------
18,158,104 24,908,063
----------- -----------
Computers and Information (1.3%):
29,000 Hewlett-Packard Co. 2,073,920 3,621,375
----------- -----------
Diversified Technology (3.1%):
170,000 Nokia Corp. Sponsored ADR 380,631 8,489,375
----------- -----------
Drugs and Health Supplies (4.3%):
20,000 Johnson & Johnson 1,199,781 2,037,500
197,750 Pfizer, Inc. 2,447,382 9,492,000
----------- -----------
3,647,163 11,529,500
----------- -----------
</TABLE>
<PAGE>
BERGSTROM CAPITAL CORPORATION
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Principal Common Stocks (Unaudited)--
Amount Continued Cost Value
<C> <S> <C> <C>
Electrical Components (3.2%):
165,000 General Electric Co. $ 4,571,182 $ 8,745,000
----------- -----------
Electronics/New Technology (16.4%):
162,000 Cisco Systems, Inc. (A) 1,322,839 10,297,125
5,000 Corning, Inc. 1,044,953 1,349,375
126,000 EMC Corp. Mass (A) 2,020,583 9,694,125
40,000 Intel Corp. 1,954,028 5,347,500
51,000 JDS Uniphase Corp. (A) 1,055,258 6,113,625
56,000 Nortel Networks Corp. 2,262,537 3,822,000
37,000 Qualcomm, Inc. (A) 627,484 2,220,000
22,000 STMicroelectronics N V 1,339,250 1,412,125
34,000 Sun Microsystems, Inc. (A) 2,900,702 3,091,875
14,000 Texas Instruments, Inc. 1,288,855 961,625
----------- -----------
15,816,489 44,309,375
----------- -----------
Industrial Machinery (2.8%):
160,000 Tyco International Ltd. New 2,248,167 7,580,000
----------- -----------
Insurance (2.8%):
43,750 American International Group, Inc. 440,727 5,140,625
22,000 Marsh & McLennan Companies, Inc. 1,662,036 2,297,625
----------- -----------
2,102,763 7,438,250
----------- -----------
Petroleum Services (0.9%):
31,000 Schlumberger Ltd. 2,006,608 2,313,375
----------- -----------
Pharmaceuticals (7.2%):
32,000 Bristol-Myers Squibb Co. 215,411 1,864,000
3,900 Genentech, Inc. (A) 623,795 670,800
44,000 Glaxo Wellcome PLC Sponsored ADR 2,366,952 2,543,750
4,200 Human Genome Sciences, Inc. (A) 581,059 560,175
44,000 Lilly Eli & Co. 862,839 4,394,500
42,000 Merck & Co., Inc. 3,256,625 3,218,250
4,500 Millennium Pharmaceuticals, Inc. (A) 530,979 503,438
32,000 PE Corp.-PE Biosystems Group 1,762,798 2,108,000
31,000 Pharmacia Corp. 1,567,050 1,602,312
16,000 Sepracor, Inc. (A) 497,400 1,930,000
----------- -----------
12,264,908 19,395,225
----------- -----------
Publishing (0.6%):
20,000 Time Warner, Inc. 1,237,508 1,520,000
----------- -----------
</TABLE>
<PAGE>
BERGSTROM CAPITAL CORPORATION
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Principal
Amount Common Stocks (Unaudited)--Continued Cost Value
<C> <S> <C> <C>
Regulated Investment Companies (8.6%):
81,132 Dresdner RCM Global Technology Fund (B) $ 4,300,000 $ 5,664,641
421,159 Dresdner RCM International Growth Equity
Fund (B) 7,245,946 8,157,845
955,399 Dresdner RCM MidCap Fund, Inc. (B) 5,340,475 9,525,328
------------ ------------
16,886,421 23,347,814
------------ ------------
Restaurants (0.6%):
46,000 McDonalds Corp. 630,364 1,515,125
------------ ------------
Retail Trade (7.1%):
58,000 Colgate Palmolive Co. 2,255,863 3,472,750
54,000 Costco Companies, Inc. (A) 1,538,785 1,782,000
45,000 Home Depot, Inc. 943,546 2,247,188
40,000 Kohls Corp. (A) 949,282 2,225,000
37,000 Safeway, Inc. (A) 1,335,330 1,669,625
23,000 Target Corp. 1,177,430 1,334,000
60,000 Walgreen Co. 1,542,744 1,931,250
80,000 Wal-Mart Stores, Inc. 3,416,305 4,610,000
------------ ------------
13,159,285 19,271,813
------------ ------------
Software and Processing (8.7%):
6,000 Check Point Software Technologies, Ltd.
(A) 1,102,698 1,270,500
105,000 Microsoft Corp. (A) 4,327,819 8,400,000
51,000 Oracle Corp. (A) 3,685,051 4,287,188
8,000 Siebel Systems, Inc. (A) 1,257,651 1,308,500
41,625 Veritas Software Co. (A) 1,017,500 4,704,275
28,000 Yahoo, Inc. (A) 2,004,921 3,468,500
------------ ------------
13,395,640 23,438,963
------------ ------------
Utilities (1.5%):
62,000 Enron Corp. 1,988,113 3,999,000
------------ ------------
Totals--Common Stocks 116,978,033 268,560,409
------------ ------------
Totals--Investments $118,416,881 $269,999,257
============ ============
</TABLE>
(A) Non-income producing securities.
(B) Regulated investment company advised by Dresdner RCM Global Investors LLC,
the Corporation's investment adviser.
See accompanying Notes to Financial Statements.
<PAGE>
BERGSTROM CAPITAL CORPORATION
-------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES
The Corporation is registered under the Investment Company Act of 1940 as a
nondiversified, closed-end management company. The following is a summary of
significant accounting policies consistently followed by the Corporation in
the preparation of its financial statements. The policies are in conformity
with generally accepted accounting principles.
A. Security valuation--Securities traded on national exchanges are valued at
the closing prices on the last business day of the reported period. Over-
the-counter securities and listed securities not traded on that day are
valued at the bid prices (asked prices for short open positions) at the
close of business on that day. Securities not publicly traded are valued at
fair value as determined by the Board of Directors. Cost of securities is
determined on the specific identification basis. Short-term notes which
mature in sixty days or less from the last day of the reported period are
valued at amortized cost, which approximates market value. Short-term notes
which mature in more than sixty days are valued at the quoted yield
equivalent on the last day of the reported period for securities of a
comparable maturity, quality, and type.
B. Security transactions and related investment income--Security transactions
are accounted for on the trade date (date the order to buy or sell is
executed). Dividend income and distributions to stockholders are recorded
on the ex-dividend dates and interest income is recorded on the accrual
basis. Realized gains and losses on investments sold are computed on the
basis of identified cost.
C. Use of estimates--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
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 and the reported amounts of revenues and
expenses during the reported period. Actual results could differ from those
estimates.
D. Short sales--The Corporation may make short sales of securities for either
speculative or hedging purposes. When the Corporation makes a short sale,
it borrows the securities sold short from a broker and places cash and/or
securities with that broker as collateral for the securities borrowed. The
Corporation may be required to pay a fee to borrow the securities and may
also be obligated to pay any dividends declared on the borrowed securities.
The Corporation will realize a gain if the security price decreases and a
loss if the security price increases between the date of the short sale and
the date on which the Corporation replaces the borrowed securities.
NOTE 2--FEDERAL INCOME TAXES
No provision has been made for federal taxes on net investment income
because the Corporation has elected to be taxed as a regulated investment
company under the Internal Revenue Code, and intends to maintain this
qualification and to distribute each year all of its taxable net investment
income to its stockholders in accordance with the minimum distribution
requirements of the Internal Revenue Code. In addition, under the Internal
Revenue Code, the Corporation may, but need not, distribute net long-term
capital gains realized. 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 Corporation is taxed as a regulated
investment company, all or a portion of the net long-term capital gains
realized by the Corporation for such year may be retained by the Corporation,
taxes thereon paid by the Corporation and appropriate credit therefore allowed
to the stockholders of the Corporation, all as provided in Section
852(b)(3)(D) of the Internal Revenue Code.
<PAGE>
BERGSTROM CAPITAL CORPORATION
-------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited)--Continued
The Board of Directors determined that the portion of the net long-term
capital gains realized during the year 1999 which was not distributed as part
of the annual dividend paid on June 7, 1999 should be retained by the
Corporation and taxes thereon should be paid by the Corporation.
For federal income tax purposes at June 30, 2000 the aggregate gross
unrealized appreciation for all securities in which there is an excess of
value over tax cost is $152,881,200, the aggregate gross unrealized
depreciation for all securities in which there is an excess of tax cost over
value is $1,298,824, the net unrealized appreciation is $151,582,376 and the
aggregate cost of securities for federal income tax purposes is $118,416,881.
NOTE 3--CAPITAL STOCK
At June 30, 2000 the issued and outstanding capital stock of the Corporation
consists of 1,000,000 shares of $1 par value capital stock (1,505,462 shares
are authorized). Net assets consist of capital paid in of $117,536,466
(including $113,698,509 of net long-term capital gains retained by the
Corporation, net of federal income taxes paid thereon on behalf of its
stockholders), undistributed net investment income of $268,190 and unrealized
appreciation of $151,582,376.
NOTE 4--SECURITIES
During the six months ended June 30, 2000, the cost of securities purchased
and the proceeds from securities sold, other than short-term investments,
aggregated $47,741,616 and $68,334,064, respectively.
NOTE 5--INVESTMENT ADVISORY CONTRACT AND PAYMENTS TO AFFILIATES
The Corporation's advisory contract with Dresdner RCM Global Investors LLC
("Dresdner RCM") provides for an advisory fee determined by multiplying the
market value of the Corporation's cash and securities as of the close of
business on the last day of each calendar quarter by one-fourth of the
applicable annual advisory fee rate. The annual advisory fee rates are .70% on
the first $10,000,000, .60% on the next $10,000,000, .50% on the next
$20,000,000, .35% on the next $20,000,000, .30% on the next $40,000,000, and
.25% on sums exceeding $100,000,000. The advisory contract with Dresdner RCM
also provides that shares of any investment company advised by Dresdner RCM or
any affiliate of Dresdner RCM shall not be considered securities for purposes
of determining advisory fees.
Officer's salary and related expenses in the amount of $42,281 have been
paid by the Corporation during the six months ended June 30, 2000 to an
officer of the Corporation for certain financial, compliance and other
administrative services.
NOTE 6--DIRECTORS FEES
Directors fees and expenses in the amount of $41,789 have been paid in 2000.
None of the directors were affiliated with the investment adviser to the
Corporation.
<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 PAMELA A. FIORINI
President and Treasurer Secretary
SUZANNE M. SCHIFFLER
Assistant 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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