{.TX}1-13
<PAGE>
CHESAPEAKE INVESTORS, INC.
SEMI-ANNUAL REPORT
MARCH 31, 2000
<PAGE>
Dear Shareholder:
The financial report, contained herein, shows results for the six month
period ended March 31, 20009. Net investment income totalled $372,454 or
$.10 per share compared to $378,356 or $.10 per share for the six month period
ended March 31, 1999. The net asset value decreased to $4.03 per share from
$4.25 per share as of March 31, 1999.
It is the Company's intent to provide as high a level of income as
possible, consistent with sound investment policies. The market is
constantly monitored to achieve the objectives of a high level of income
and the preservation of net asset value.
Sincerely,
Albert W. Turner, Warren W. Pearce, Jr.,
Chairman of the Board President
May 11, 2000
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<PAGE>
CHESAPEAKE INVESTORS, INC.
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 2000
(UNAUDITED)
<TABLE>
<CAPTION>
<S>
<C>
ASSETS:
Investments in Long-Term Securities, at Value
(Amortized Cost $14,041,570) $14,559,884
Investments in Short-Term Securities
(at cost which approximates market) 470,596
Accrued Interest Receivable 256,238
-----------
Total Assets 15,286,718
-----------
LIABILITIES:
Accounts Payable and Accrued Expenses 22,855
-----------
Total Liabilities 22,855
-----------
NET ASSETS:
Net Assets (Equivalent to $4.03 per share based on
3,783,960 shares of capital stock outstanding) $15,263,863
===========
</TABLE>
See Notes to Financial Statements
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<PAGE>
CHESAPEAKE INVESTORS, INC.
SCHEDULE OF INVESTMENTS IN SECURITIES
MARCH 31, 2000
(UNAUDITED)
<TABLE>
<CAPTION>
Face Amortized
Rating* Amount Cost Value
------ ------------ ------------- ------------
<S> <C> <C> <C> <C>
Investments in Long-Term
Securities:
Alabama:
Birmingham, Alabama
Refunding UT GO Bond
5.0%, due 4/1/19 AA $ 420,000 $ 420,000 $ 381,318
------------ ------------- ------------
Arizona:
Salt River Project,
Arizona - Series C Revenue
5.5%, due 1/1/28 AA 700,000 687,230 674,940
Maricopa County
Arizona School District
5.5%, due 7/1/05 AAA 650,000 660,836 668,460
----------- ------------- ------------
Total Arizona 1,350,000 1,348,066 1,343,400
----------- ------------- ------------
Arkansas:
Jefferson County, Arkansas
Single Family Mortgage
7.25%, due 12/1/10 Aaa 355,000 335,109 401,683
Little Rock, Arkansas
Single Family Mortgage,
7.3%:
due 9/1/00 AAA 25,000 24,938 27,850
due 9/1/01 AAA 25,000 24,798 27,850
due 9/1/02 AAA 30,000 29,604 33,420
due 9/1/03 AAA 35,000 34,371 38,990
due 9/1/04 AAA 35,000 34,217 38,990
due 9/1/05 AAA 40,000 38,942 44,560
due 9/1/06 AAA 35,000 33,942 38,990
due 9/1/07 AAA 45,000 43,481 50,130
due 9/1/08 AAA 50,000 48,148 55,701
due 9/1/09 AAA 50,000 47,994 55,701
due 9/1/10 AAA 30,000 28,710 33,420
------------ ------------- ------------
Total Arkansas 755,000 724,254 847,285
------------ ------------- ------------
</TABLE>
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<PAGE>
CHESAPEAKE INVESTORS, INC.
SCHEDULE OF INVESTMENTS IN SECURITIES (CONTINUED)
MARCH 31, 2000
(UNAUDITED)
<TABLE>
<CAPTION>
Face Amortized
Rating* Amount Cost Value
------ ------------ ------------- ------------
<C> <C> <C> <C>
<S>
Florida:
City of Gainesville, Florida,
Utility System Revenue,
9.125%, due 10/1/05 AAA 500,000 500,000 587,700
Florida State Board
of Education - Cap Outlay
7.25%, due 6/1/23 AA 200,000 198,950 204,940
------------ ------------- ------------
Total Florida 700,000 698,950 792,640
------------ ------------- ------------
Georgia:
Municipal Electric Authority
6%, due 1/1/05 AAA 700,000 722,896 735,140
------------ ------------- ------------
Illinois:
Chicago, Illinois
UTGO Public Library
6.60%, due 1/1/04 AAA 700,000 709,998 738,010
Chicago, Illinois
School Finance Authority
5%, due 6/1/09 AAA 650,000 623,493 643,500
------------ ------------- ------------
Total Illinois 1,350,000 1,333,491 1,381,510
------------ ------------- ------------
Louisiana:
Shreveport, Louisiana,
Single Family Mortgage,
6.75%, due 9/1/10 Aaa 405,000 361,403 435,173
------------- ------------- ------------
Massachusetts:
Massachusetts State Utility
Government Bond,
7.625%, due 6/1/08 Aaa 500,000 540,725 527,000
------------- ------------- ------------
</TABLE>
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PAGE>
CHESAPEAKE INVESTORS, INC.
SCHEDULE OF INVESTMENTS IN SECURITIES (CONTINUED)
MARCH 31, 2000
(UNAUDITED)
<TABLE>
<CAPTION>
Face Amortized
Rating* Amount Cost Value
------ ------------ ------------- -----------
<C> <C> <C> <C>
<S>
Minnesota:
Southern Minnesota Municipal
Power Agency, Serial A
5.7%, due 1/1/05 A+ 650,000 661,093 672,230
------------ ------------- ------------
New Jersey:
New Jersey State Ref-Ser F
5.25%, due 8/1/14 AA+ 750,000 761,130 743,025
------------ ------------- ------------
New York:
New York State
Local Revenue
5.375%, due 4/1/16 A+ 200,000 188,593 193,800
New York State
Local Revenue
5.125%, due 4/1/10 AAA 400,000 393,572 398,400
------------ ------------- ------------
Total New York 600,000 582,165 592,200
------------ ------------- ------------
North Carolina:
North Carolina Municipal
Power Agency
7.25%, due 1/1/07 BB+ 400,000 423,900 430,960
Charlotte, NC Utility
General Obligation
5.5%, due 7/1/07 AAA 500,000 514,152 514,650
------------ ------------- ------------
Total North Carolina 900,000 938,052 945,610
------------ ------------- ------------
</TABLE>
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<PAGE>
CHESAPEAKE INVESTORS, INC.
SCHEDULE OF INVESTMENTS IN SECURITIES (CONTINUED)
MARCH 31, 2000
(UNAUDITED)
<TABLE>
<CAPTION>
Face Amortized
Rating* Amount Cost Value
------ ----------- ------------- -----------
<S> <C> <C> <C> <C>
Pennsylvania:
Allegheny County, Pennsylvania
Hospital Development Authority
6.0%, due 11/1/23 AAA 700,000 674,729 700,420
Commonwealth of Pennsylvania
Utility Government Obligation
6.3%, due 11/1/02 AAA 700,000 707,201 728,140
Pennsylvania State Higher
Educational Facility
Authority
7.15%, due 6/15/15 AAA 500,000 503,083 502,900
Pennsylvania Intergovernmental
Coop Authority Special
Tax Revenue
7%, due 6/15/04 AAA 500,000 511,168 540,300
------------ ------------- ------------
Total Pennsylvania 2,400,000 2,396,181 2,471,760
------------ ------------- ------------
Texas:
Cypress-Fairbanks, Texas
Independent School District
5.5%, due 2/15/10 AAA 700,000 700,000 706,128
Texas Water Development
Board Revenue
5.5%, due 7/15/10 AAA 750,000 752,061 763,725
------------ ------------- ------------
Total Texas 1,450,000 1,452,061 1,469,853
------------ ------------- ------------
</TABLE>
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<PAGE>
CHESAPEAKE INVESTORS, INC.
SCHEDULE OF INVESTMENTS IN SECURITIES (CONTINUED)
MARCH 31, 2000
(UNAUDITED)
<TABLE>
<CAPTION>
Face Amortized
Rating* Amount Cost Value
------- ------------ ------------- ------------
<C> <C> <C> <C>
<S>
Utah:
Salt Lake City, Utah
Hospital Revenue
8.125%, due 5/15/15 AAA 700,000 708,607 850,220
------------ ------------- ------------
Washington:
Washington State Public Power
5.125%, due 7/1/17 AAA 400,000 392,496 371,520
------------ ------------- ------------
Total Investments in
Long-Term Securities $ 14,030,000 $ 14,041,570 $ 14,559,884
============ ============= ============
* Ratings - Standard & Poor's or Moody's
Unaudited
<CAPTION>
Face
Amount Cost
------------- --------------
<S>
Investments in Short-Term Securities:
State Street Global Advisor
Tax Free Money Market Fund, 2.13% $ 470,596 $ 470,596
Total Investments ------------- --------------
in Short-Term Securities $ 470,596 $ 470,596
============= ===============
</TABLE>
See Notes to Financial Statements
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PAGE>
CHESAPEAKE INVESTORS, INC.
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED
MARCH 31, 2000
(UNAUDITED)
<TABLE>
<CAPTION>
<C>
<S>
INVESTMENT INCOME:
Interest Income $ 439,066
------------
EXPENSES:
Investment Advisory Fee 25,857
Custodian Fees 5,548
Transfer Agent and Dividend
Disbursing Agent Fees 6,734
Legal and Auditing Services 13,250
Administrative Services 9,000
Compensation of Directors not
Members of the Investment Adviser's Organization 3,000
Printing Costs 1,982
Miscellaneous 1,241
------------
Total Expenses 66,612
------------
Net Investment Income 372,454
------------
REALIZED GAIN AND UNREALIZED (LOSS) ON INVESTMENTS:
Realized Gain From Investment
Transactions (Excluding Short-Term Securities):
Proceeds from Sales 308,950
Cost of Investments Sold 288,072
------------
Net Realized Gain on Investments 20,878
------------
Unrealized Loss on Investments:
Unrealized Appreciation of Investments
at Beginning of Period 668,382
Unrealized Appreciation of Investments
at End of Period 528,315
------------
Net Unrealized Loss on Investments (140,067)
------------
Net Realized Gain and Unrealized Loss on
Investments (119,189)
------------
Net Increase in Net Assets Resulting
from Operations $ 253,265
============
</TABLE>
See Notes to Financial Statements
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<PAGE>
CHESAPEAKE INVESTORS, INC.
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED MARCH 31, 2000 AND
FOR THE YEAR ENDED SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
Six Month Period Year Ended
Ended March 31, September 30,
2000 1999
(Unaudited) (Audited)
-------------- --------------
<C> <C>
<S>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net Investment Income $ 372,454 $ 767,329
Net Realized Gain on
Investments 20,878 62,316
Net Unrealized Loss
on Investments (140,067) (846,483)
------------- -------------
Net Increase (Decrease) in Net Assets
Resulting from Operations 253,265 (16,838)
Dividends to Shareholders from:
Net Investment Income (372,833) (793,465)
($.10 and $.21 per share, respectively
Net Realized Gain on Investments (62,316) (1,155)
($.02 and $.00 per share, respectively
-------------- -------------
Total Decrease
in Net Assets (181,884) (811,458)
NET ASSETS:
Beginning of Period 15,445,747 16,257,205
-------------- --------------
End of Period (Including Undistributed
Net Investment Income of $796,700
and $797,079, respectively, and
undistributed net realized gains
of $20,878 and $62,316,
respectively) $ 15,263,863 $ 15,445,747
============= =============
</TABLE>
See Notes to Financial Statements
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<PAGE>
CHESAPEAKE INVESTORS, INC.
NOTES TO FINANCIAL STATEMENTS
(1) - SIGNIFICANT ACCOUNTING POLICIES
Chesapeake Investors, Inc. (the "Company") is registered under the
Investment Company Act of 1940, as amended, as a diversified closed-end
management investment company and invests solely in municipal obligations.
The following is a summary of significant accounting policies consistently
followed by the Company in the preparation of its financial statements.
The policies are in conformity with generally accepted accounting
principles.
A. Investment Security Valuation - Securities are valued at the mean
between the latest bid and asked prices. Any securities for which market
quotations are not readily available are appraised at fair value as
determined in good faith under methods or procedures authorized by the
Board of Directors.
B. Federal Income Taxes - The Company intends to comply with the provisions
of the Internal Revenue Code available to investment companies and to
distribute to shareholders annually all of its net investment income.
Accordingly, no provision for Federal income tax is necessary. The
Company, based on provisions of the Internal Revenue Code, expects to
distribute income from capital gains to its shareholders. Accordingly,
such gains will be taxable to the shareholders. The character of
dividends from net investment income or net realized gains on investments
may differ from their ultimate characterization for Federal income tax
purposes due to generally accepted accounting principles and tax
differences in the character of income and expense recognition.
C. Other - The Company follows industry practice and records security
transactions on the trade date. Interest income is recorded on the
accrual basis. Bond premiums and discounts are amortized to income
ratably over the total number of months from date of purchase to date of
maturity of the bonds. Certain securities have optional or mandatory
tender features which give them a shorter effective maturity date.
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<PAGE>
(2) - CAPITAL STOCK
At March 31, 2000, there were 6,000,000 shares of $.50 par value
capital stock authorized. Shares issued and outstanding at March 31, 2000
totalled 3,783,960.
(3) - PURCHASES AND SALES OF SECURITIES
Sales and maturities of securities during the six month period ended
March 31, 2000, other than short-term securities, aggregated $308,950.
There were no purchases of long-term securities during the six month
period ended March 31, 2000.
For Federal income tax purposes, the identified cost of investments
owned, excluding short-term securities, at March 31, 2000, was $13,829,362.
Gross unrealized gains and losses totalled $830,456 and $99,391, respectively,
for Federal income tax purposes at March 31, 2000.
(4) - INVESTMENT ADVISORY FEE AND TRANSACTIONS WITH AFFILIATES
Federated Investment Counseling, Inc. is the investment adviser to the
Company. The advisory contract provides for an annual fee equal to .35 of
1% of the weighted average managed assets of the Company. The investment
advisory fee for the six month period ended March 31, 2000 totalled $25,857.
For the six month period ended March 31, 2000, fees of $9,000 for
administrative services were paid to Carrollton Enterprises Management
Company, LLC. The Chairman of the Board is the owner of that firm.
(5) - DIVIDENDS
During the six month period ended March 31, 2000, the Company
distributed dividends of $453,149 to its shareholders. On March 28, 2000,
the Company declared a $.05 per share dividend, aggregating $189,195, payable
April 25, 2000, to shareholders of record April 11, 2000.
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<PAGE>
CHESAPEAKE INVESTORS, INC.
SUPPLEMENTARY INFORMATION
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Six-Months Fiscal Fiscal Fiscal Fiscal
March 31, Year Year Year Year
2000 1999 1998 1997 1996
------ ------ ------ ------ -------
<C> <C> <C> <C> <C>
<S>
PER SHARE DATA:*
Investment Income $ .10 $ .23 $ .24 $ .24 $ .25
Expenses .02 .03 .03 .03 .03
------ ------ ------ ------ ------
Net Investment Income .08 .20 .21 .21 .22
Dividends from:
Net Investment Income (.10) (.21) (.21) (.19) (.23)
Net Realized Gain
on Investments - - - (.04) (.01)
Net Realized and
Unrealized Gain
(Loss) on Investments (.03) (.20) .07 .06 .01
------ ------ ------ ------ ------
Net Increase (Decrease)
in Net Asset Value (.05) (.21) .07 .04 (.01)
Net Asset Value:
Beginning of Period 4.08 4.29 4.22 4.18 4.19
------ ------ ------ ------ ------
End of Period $ 4.03 $ 4.08 $ 4.29 $ 4.22 $ 4.18
====== ====== ====== ====== ======
RATIOS:
Ratio of Expenses to
Average Net Assets .43% .79% .72% .72% .72%
Ratio of Net Investment
Income to Average Net
Assets 2.39% 4.82% 4.90% 5.07% 5.22%
</TABLE>
*Selected data for a share of capital stock outstanding throughout the year.
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<PAGE>
DIRECTORS INVESTMENT ADVISER
Albert W. Turner Federated Investment
Herndon G. Kilby Counseling, Inc.
Warren W. Pearce, Jr. Pittsburgh, Pennsylvania
Edna L. Ryon
Harry F. Breitback
CUSTODIAN
State Street Bank
and Trust Company
North Quincy, Massachusetts
OFFICERS TRANSFER AGENT
Albert W. Turner, Registrar and Transfer Company
Chairman of the Board Cranford, New Jersey
Warren W. Pearce, Jr.,
President
Herndon G. Kilby,
Secretary-Treasurer
OFFICES
11785 Beltsville Drive
Beltsville, Maryland
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