<PAGE>
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- ----------------------------------
BERGSTROM
CAPITAL
CORPORATION
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2000 FIRST 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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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, payable June
5, 2000 to stockholders of record 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
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221 First Avenue West, Suite 320
Seattle, Washington 98119-4224
May 8, 2000
Dear Fellow Stockholders:
The Board of Directors of Bergstrom Capital Corporation (the "Company") has
declared a dividend of $17.75 per share payable on June 5, 2000 to
stockholders of record on May 18, 2000. The Company estimates that the sources
of this dividend will be $.08 per share from net investment income for the
year ending December 31, 2000, $10.42 per share from net short-term capital
gains realized during the year ending December 31, 2000 and $7.25 per share
from net long-term capital gains realized during the year ending December 31,
2000. Please refer to the Distribution Policy in this report.
During the first quarter of 2000 the Company's net assets increased from
$276,737,285 to $293,938,239 which is an increase of $17,200,954. The increase
in net assets was composed of net investment income of $6,209, realized gain
on investments of $14,752,150, and an increase in unrealized appreciation of
$2,442,595.
The per share net asset value increased from $276.74 on December 31, 1999 to
$293.94 on March 31, 2000, an increase of 6.2%. During the same period the Dow
Jones Industrial Average, adjusted for dividends, decreased 4.7% and the
Standard & Poor's 500 Stock Average, adjusted for dividends, increased 2.3%.
The per share net asset value on Friday, May 5, 2000 was $274.12.
During the first quarter of 2000 the Company had total interest and dividend
income of $360,956 as compared to $310,026 for the same period in 1999 for an
increase of $50,930. During the first quarter of 2000 operating expenses were
$354,747 as compared to $298,185 for the same period in 1999 for an increase
of $56,562. The resulting net investment income of $6,209 for the first
quarter of 2000 is a decrease of $5,632 from $11,841 for the first quarter of
1999.
The following are the major ($500,000 or more) purchases and sales made in
the Company's portfolio of securities during the first quarter of 2000:
<PAGE>
BERGSTROM CAPITAL CORPORATION
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<TABLE>
<CAPTION>
SHARES
---------------------------------
HELD
MARCH 31,
SECURITY NAME ADDITIONS REDUCTIONS 2000
- --------------------------------------------- --------- ---------- ---------
<S> <C> <C> <C>
American Home Products Corp. ................ 37,000 0
Amgen, Inc. ................................. 40,000 630,000
Baxter International, Inc. .................. 10,000 65,000
Bed Bath & Beyond, Inc. ..................... 67,500 0
Conoco, Inc. ................................ 118,000 42,500 118,000
Dresdner RCM International Growth Equity
Fund........................................ 119,826 421,159
Federal Home Loan Mortgage Corp. ............ 15,000 0
Federal National Mortgage Association........ 13,000 0
Glaxo Wellcome PLC Sponsored ADR............. 27,000 27,000
International Business Machines.............. 29,100 0
JDS Uniphase Corp. .......................... 46,000(1) 4,000(1) 92,000
Lilly Eli & Co. ............................. 10,000 44,000
Lucent Technologies, Inc. ................... 35,000 0
MCI Worldcom, Inc. .......................... 14,500 122,000
Merck & Co., Inc. ........................... 42,000 42,000
Microsoft Corp. ............................. 18,000 110,000
Oracle Corp. ................................ 35,000(2) 35,000
PE Corp.-PE Biosystems Group................. 35,000(3) 35,000
Pharmacia & Upjohn, Inc. .................... 19,500 0
Qualcomm, Inc. .............................. 57,000 55,000
Qwest Communications International, Inc. .... 75,000 75,000
Safeway, Inc. ............................... 37,000 37,000
Sun Microsystems, Inc. ...................... 18,000 18,000
Texas Instruments, Inc. ..................... 7,000 20,000 7,000
Wal-Mart Stores, Inc. ....................... 40,000 80,000
</TABLE>
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(1) Sold 4,000 shares and then received 46,000 shares as a stock split.
(2) Purchased 7,500 shares and then received 7,500 shares as a stock split
and then purchased 20,000 shares.
(3) Purchased 17,500 shares and then received 17,500 shares as a stock split.
<PAGE>
BERGSTROM CAPITAL CORPORATION
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The value of the Company's investment in the securities of Amgen, Inc.
amounted to 13.1% of the Company's total assets at March 31, 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.
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
March 31, 2000 (Unaudited)
<TABLE>
<S> <C>
Assets:
Investments, at value (see accompanying schedule):
Short-term investments (cost $850,994) $ 850,994
Common stocks (cost $116,211,813) 292,398,578
------------
Total Investments (cost $117,062,807) 293,249,572
Cash 5,000
Receivable for securities sold 2,733,855
Interest and dividends receivable 130,096
Other assets 8,640
------------
Total assets 296,127,163
------------
Liabilities:
Advisory fee payable 210,517
Payable for securities purchased 1,927,775
Other accrued expenses 50,632
------------
Total liabilities 2,188,924
------------
Net assets applicable to 1,000,000 outstanding shares of
capital stock equivalent to $293.94 per share on March 31,
2000 $293,938,239
============
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
MARCH 31, YEAR ENDED
2000 DECEMBER 31,
(Unaudited) 1999
<S> <C> <C>
Operations:
Net investment income $ 6,209 $ 110,760
Realized gain on investments 14,752,150 34,283,577
Increase in unrealized appreciation 2,442,595 55,510,069
------------ ------------
Net increase in net assets resulting from operations 17,200,954 89,904,406
------------ ------------
Dividends to stockholders:
From net investment income -- (110,760)
From net realized gain on investments -- (13,389,240)
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Total dividends to stockholders ($13.50 per share--
1999) -- (13,500,000)
------------ ------------
Total increase in net assets 17,200,954 76,404,406
Net assets, beginning of period 276,737,285 200,332,879
------------ ------------
Net assets, end of period $293,938,239 $276,737,285
============ ============
</TABLE>
See also Notes to Financial Statements in the Company's 1999 Annual Report to
Stockholders.
<PAGE>
BERGSTROM CAPITAL CORPORATION
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STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2000 (Unaudited)
<TABLE>
<S> <C> <C>
Investment Income:
Interest $ 33,797
Dividends 327,159
-----------
Total income 360,956
-----------
Expenses:
Advisory fees 221,073
Auditing fees 25,500
Directors' fees and expenses 21,006
Officer's salary and related expenses 21,244
Accounting expenses 15,003
Legal fees 15,233
State and other taxes 8,518
Transfer agent fees and expenses 9,780
Other expenses 3,815
Custodian fees 7,069
Stockholders' meeting and reports 4,881
Fee for shares listed on American Stock Exchange 1,625
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Total expenses 354,747
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Net investment income ($.01 per share) 6,209
-----------
Realized and unrealized gain on investments:
Realized gain on investments (excluding short-term
investments):
Proceeds from sale of securities $29,955,184
Cost of securities sold 15,203,034
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Realized gain on investments sold 14,752,150
Unrealized appreciation of investments:
Beginning of period 173,744,170
End of period 176,186,765
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Increase in unrealized appreciation 2,442,595
-----------
Net gain on investments ($17.19 per share) 17,194,745
-----------
Net increase in net assets resulting from operations $17,200,954
===========
</TABLE>
See also Notes to Financial Statements in the Company's 1999 Annual Report to
Stockholders.
<PAGE>
BERGSTROM CAPITAL CORPORATION
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SCHEDULE OF INVESTMENTS
March 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares or
Principal
Amount Cost Value
<C> <S> <C> <C>
Short-Term Investments (0.3%):
$850,994 State Street Bank and Trust Company, 4.5%
Euro-Dollar Deposit Due 4/1/00 $ 850,994 $ 850,994
-------- ----------- -----------
$850,994 Total--Short-Term Investments 850,994 850,994
======== ----------- -----------
Common Stocks (99.7%):
Banks (1.8%):
52,000 Bank New York, Inc. 1,065,418 2,161,250
52,500 Citigroup, Inc. 1,433,940 3,113,906
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2,499,358 5,275,156
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Beverages (1.5%):
60,000 Coca Cola Enterprises, Inc. 810,797 1,293,750
67,500 Coca-Cola Co. 90,276 3,168,281
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901,073 4,462,031
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Biotechnology (13.2%):
630,000 Amgen, Inc. (A) 822,858 38,666,250
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Broadcasting (1.6%):
69,000 Clear Channel Communications, Inc. 3,867,816 4,765,313
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Communication Systems (7.6%):
37,000 Bell Atlantic Corp. 2,247,176 2,261,625
54,000 GTE Corp. 3,660,857 3,834,000
122,000 MCI WorldCom, Inc. (A) 1,638,146 5,528,125
29,000 Nextel Communications, Inc. (A) 404,277 4,299,250
75,000 Qwest Communications International, Inc.
(A) 2,986,817 3,637,500
23,000 SBC Communications, Inc. 1,075,954 966,000
32,500 Vodafone Airtouch PLC Sponsored ADR 1,310,774 1,805,781
----------- -----------
13,324,001 22,332,281
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Computers and Information (1.3%):
29,000 Hewlett-Packard Co. 2,656,760 3,844,313
----------- -----------
Diversified Technology (3.3%):
45,000 Nokia Corp. Sponsored ADR 403,923 9,776,250
----------- -----------
</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>
Drugs and Health Supplies (1.3%):
20,000 Johnson & Johnson $ 1,199,781 $ 1,401,250
63,000 Pfizer, Inc. 823,740 2,303,438
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2,023,521 3,704,688
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Electrical Components (2.9%):
55,000 General Electric Co. 4,571,182 8,535,312
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Electronics/New Technology (19.0%):
26,000 Applied Materials, Inc. (A) 1,043,775 2,450,500
162,000 Cisco Systems, Inc. (A) 1,322,839 12,524,625
66,000 EMC Corp. Mass (A) 2,200,501 8,250,000
30,000 Intel Corp. 630,583 3,958,125
92,000 JDS Uniphase Corp. (A) 1,946,756 11,091,750
20,000 Motorola, Inc. 1,464,544 2,847,500
28,000 Nortel Networks Corp. 2,262,537 3,528,000
55,000 Qualcomm, Inc. 944,228 8,212,188
18,000 Sun Microsystems, Inc. (A) 1,442,043 1,686,656
7,000 Texas Instruments, Inc. 1,288,856 1,120,000
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14,546,662 55,669,344
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Household Products (Non-Durable) (0.2%):
10,000 Proctor & Gamble Co. 238,425 562,500
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Industrial Machinery (3.0%):
177,600 Tyco International Ltd. New 3,029,508 8,857,800
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Insurance (2.5%):
43,750 American International Group, Inc. 440,727 4,790,625
22,000 Marsh & McLennan Companies, Inc. 1,662,036 2,426,875
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2,102,763 7,217,500
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Medical Supplies (1.8%):
65,000 Baxter International, Inc. 469,473 4,074,687
21,500 Guidant Corp. 1,044,683 1,264,469
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1,514,156 5,339,156
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Metal Mining (0.8%):
33,000 Alcoa, Inc. 2,122,302 2,318,250
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</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>
Petroleum Services (1.5%):
118,000 Conoco, Inc. $ 2,960,950 $ 3,023,750
18,000 Schlumberger Ltd. 928,152 1,377,000
----------- -----------
3,889,102 4,400,750
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Pharmaceuticals (6.4%):
32,000 Bristol-Myers Squibb Co. 215,411 1,848,000
27,000 Glaxo Wellcome PLC Sponsored ADR 1,311,371 1,547,437
44,000 Lilly Eli & Co. 862,839 2,772,000
42,000 Merck & Co., Inc. 3,256,625 2,609,250
35,000 PE Corp.-PE Biosystems Group 1,929,244 3,377,500
46,000 Schering-Plough Corp. 400,541 1,690,500
16,000 Sepracor, Inc. (A) 497,400 1,165,000
40,000 Warner Lambert Co. 665,208 3,900,000
----------- -----------
9,138,639 18,909,687
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Publishing (0.7%):
20,000 Time Warner, Inc. 1,237,508 2,000,000
----------- -----------
Regulated Investment Companies (8.6%):
81,132 Dresdner RCM Global Technology Fund (B) 4,300,000 6,090,585
421,159 Dresdner RCM International Growth Equity
Fund (B) 7,245,946 9,400,264
955,399 Dresdner RCM MidCap Fund, Inc. (formerly
Dresdner RCM Growth Equity Fund, Inc.)
(B) 5,340,475 9,811,948
----------- -----------
16,886,421 25,302,797
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Restaurants (1.3%):
100,000 McDonalds Corp. 1,962,886 3,756,250
----------- -----------
Retail Trade (7.9%):
30,800 Circuit City Stores 1,170,649 1,874,950
58,000 Colgate Palmolive Co. 2,255,864 3,269,750
68,000 Costco Companies, Inc. (A) 2,115,016 3,574,250
45,000 Home Depot, Inc. 943,546 2,902,500
20,000 Kohls Corp. (A) 949,282 2,050,000
37,000 Safeway, Inc. (A) 1,335,330 1,674,250
23,000 Target Corp. (formerly Dayton Hudson
Corp.) 1,177,430 1,719,250
60,000 Walgreen Co. 1,542,744 1,545,000
80,000 Wal-Mart Stores, Inc. 3,416,305 4,440,000
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14,906,166 23,049,950
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</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>
Software and Processing (9.9%):
39,300 BMC Software, Inc. (A) $ 9,201 $ 1,940,438
110,000 Microsoft Corp. (A) 4,863,312 11,687,500
35,000 Oracle Corp. (A) 2,382,565 2,732,187
41,625 Veritas Software Co. (A) 1,017,500 5,452,875
42,000 Yahoo, Inc. (A) 3,306,092 7,197,750
------------ ------------
11,578,670 29,010,750
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Utilities (1.6%):
62,000 Enron Corp. 1,988,113 4,642,250
------------ ------------
Totals--Common Stocks 116,211,813 292,398,578
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Totals--Investments $117,062,807 $293,249,572
============ ============
</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 1999 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 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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