<PAGE>
Davis New York
Venture Fund
Semi-Annual Report
January 31, 1998
[WALL ST. LOGO]
DAVIS
=====
FUNDS
<PAGE>
DAVIS NEW YORK VENTURE FUND, INC.
P.O. Box 1688, 124 East Marcy Street
Santa Fe, New Mexico 87501
===============================================================================
Dear Shareholder:
Market Overview
While 1997 was another strong year for stocks, volatility increased markedly in
the latter part of the year. We think 1998 could be a time when money managers
will earn their money every day, every week, every month. The market has never
been up 20% for more than three years in a row. So the odds are it will be in a
trading range in 1998.
The financial turmoil in Asia has triggered concerns that the crisis will hurt
U.S. exports and corporate earnings as markets are flooded with cheap Asian
imports. Certainly the crisis will mean earnings disruptions and even
bankruptcies for companies in the Far East. But U.S. companies with a longer
view may be able to gain market share through acquisitions and joint ventures
in Southeast Asian markets with exciting growth potential over the next 20 or
30 years. So what was impossible during good times because of these countries'
closed economic systems may become possible now that Asian companies need U.S.
capital and ingenuity to get back on track.
We have enjoyed a long bull market with a lack of major corrections, and we are
entering a period when expectations should be lower. But we believe that the
bullish case for equities remains intact and that any market weakness next year
may merely be the pause that refreshes.
Investors' greatest fear should not be a correction, but a financial bubble
where stock valuations inflate to unrealistic levels and then crash, as they
did in 1973 and 1974. A market correction would allow us to buy the same
businesses at bargain prices, and that should be welcomed, not feared.
When merchandise goes on sale in stores, people are happy to buy it thinking
they are getting a bargain. But when stocks or industry groups go on sale,
people get nervous rather than using those times as buying opportunities. Most
investors should adopt a long-term perspective and make it a habit to invest
regularly every week or every month, without trying to second-guess short-term
market developments. That is the way to benefit from the power of compounding
over decades.(1)
At Davis Selected Advisers, our focus has always been on serving the best
interest of our shareholders, and the means by which we accomplish this is
through thorough research. We concentrate on finding good businesses with
strong managements, and we think three years or even 30 years ahead, not 30
days or three months ahead.
If you take a 30-year view of the market, assume a starting level of 8,000 for
the Dow and compound that figure at 7% annually--not an unreasonable growth
rate based on past performance--the Dow would be at 64,000 in three decades. If
you start that process with the Dow at 6,000 and compound that amount at 7% a
year, the Dow would reach 48,000 in 30 years.(2)
Either figure is so far ahead of where the market is today that we think it is
pointless to worry about the next 2,000 points on the Dow. That is why we
intend to remain committed owners of equities in 1998.
Sincerely,
/s/ Shelby M.C. Davis
- ------------------------
Shelby M.C. Davis
Chief Investment Officer
February 24, 1998
<PAGE>
DAVIS NEW YORK VENTURE FUND, INC.
P.O. Box 1688, 124 East Marcy Street
Santa Fe, New Mexico 87501
===============================================================================
MANAGEMENT'S DISCUSSION AND ANALYSIS
PERFORMANCE OVERVIEW
o The Davis New York Venture Fund's Class A shares returned .42% on net asset
value for the six-month period and 23.75% for the one-year period ended
January 31, 1998.(3) This compares with returns of 3.56% and 26.99%,
respectively, for the Standard & Poor's 500 Index during the same time
periods.2
o As long-term investors, our objective is to build wealth through multi-year
compounding of growth. Since the fund was founded on February 17, 1969, its
Class A shares have outperformed the S&P 500 Index in 22 out of 29 years.
o The fund's Class A shares rank in the top 3 of the 75 growth funds tracked
by Lipper Analytical Services since February 28, 1969. The fund has also
been in the top 10% of all growth funds for the last three, five, 10, 15, 20
and 25 years, which we believe is an unsurpassed record of consistency.(4)
o Furthermore, the Davis New York Venture Fund won a place on the U.S. News
Honor Roll of "Best Funds for the Long Haul." According to U.S. News, the
equity funds on this honor roll "share a remarkable achievement: All have
placed in the top funds in their categories in the magazine's 'Best Funds
for the Long Haul' each year for the last three years."(5)
o In addition, as of December 31, 1997, the fund's Class A shares held
Morningstar's highest overall rating of ***** (five stars) for risk-adjusted
performance out of 2,364 domestic equity funds.(6)
o According to Morningstar, "Davis New York Venture Fund hasn't been
spoiled by success....The fund's appeal is obvious. Its top-decile 1997
ranking makes the third year in a row it has been tops in its category
....[Chris] Davis is proving his worth as day-to-day manager, and Shelby
Davis remains involved in shaping the fund."(7)
AN INTERVIEW WITH CHRISTOPHER C. DAVIS, PORTFOLIO MANAGER
Q. How would you describe the market's behavior in 1997?
A. Two characteristics defined the market in 1997. The first was sloppy
thinking--that is, the belief that stocks can keep going up faster than
earnings per share because of expanding price/earning multiples...that earnings
per share can keep going up faster than revenue because of share repurchases,
margin expansion and financial engineering...that revenue can keep growing
faster than units sold because of price increases. This dynamic cannot go on
forever.
2
<PAGE>
DAVIS NEW YORK VENTURE FUND, INC.
P.O. Box 1688, 124 East Marcy Street
Santa Fe, New Mexico 87501
===============================================================================
MANAGEMENT'S DISCUSSION AND ANALYSIS-CONTINUED
AN INTERVIEW WITH CHRISTOPHER C. DAVIS, PORTFOLIO MANAGER-CONTINUED
The flaws in that "new-era" thinking are apparent now. Companies clearly have
little pricing power today. Margins are near all-time highs, and long overdue
changes in accounting for executive options may put further pressure on the
expense line. In addition, the benefits of downsizing, reengineering and
write-offs, as well as the easy benefits of international expansion and a
depreciating dollar, are largely behind us. So perhaps the "easy" gains are
behind us as the fundamentals catch up with stock market valuations.
The second defining characteristic of the market in 1997 was volatility--but,
in our mind, that can be a good thing. To quote from a story (originally
attributable to Ben Graham) that Warren Buffett recounted at the annual meeting
of Berkshire Hathaway:
"Just imagine that when you buy a stock, you've bought into a business where
you have this obliging partner who comes around every day and offers you a
price at which he'll either buy or sell....No one ever does that in a private
business....But, in the stock market, you get it. Well, that's a huge
advantage. And it's a bigger advantage if this partner of yours is a heavy
drinking manic depressive. In fact, the crazier he is, the more money you're
going to make. So, as an investor, you should love volatility."(8)
Q. What changes do you anticipate in investor focus going forward?
A. We expect to see a much greater emphasis on old-fashioned investment basics,
rather than on new-era thinking. And we intend to continue with the investment
approach that has been successfully employed by the Davis family in bull and
bear markets during the past 50 years. Most importantly, we recognize that
stocks are not merely pieces of paper but represent ownership interests in
businesses. As a result, our investment process focuses on two simple
questions: What kind of businesses do we want to own and how much should we pay
for them?
The kinds of businesses we want to own are those with: first-class management,
high returns on capital, a lean expense structure, a dominant or growing share
in a growing market, products or services that do not become obsolete, a strong
balance sheet, and successful international operations.
In terms of how much to pay, we want to buy stocks of those businesses for
considerably less than they are worth. No business is a good buy regardless of
the price. Almost 50 years ago, Ben Graham advised investors to buy stocks as
they buy groceries, not perfume. That means using common sense, rather than
emotion, to buy more when there is a sale and to substitute other selections
when prices rise--rather than thinking a high price enhances mystique, as many
people do when buying perfume.
We base stock valuations on the return we would expect to earn if we bought the
entire business, and we focus on the owner's cash earnings relative to the
purchase price. That is, we look at how much money we could put in our pocket
at the end of the year if we owned the whole business, after spending what was
required to maintain the business' competitive position. Then we determine what
that amount represents as a percentage of the current market capitalization,
including debt. This is also known as the earnings yield.
To our way of thinking, growth and value are two sides of the same coin. What
we are looking for is the opportunity to buy growth at value prices.
3
<PAGE>
DAVIS NEW YORK VENTURE FUND, INC.
P.O. Box 1688, 124 East Marcy Street
Santa Fe, New Mexico 87501
===============================================================================
MANAGEMENT'S DISCUSSION AND ANALYSIS-CONTINUED
AN INTERVIEW WITH CHRISTOPHER C. DAVIS, PORTFOLIO MANAGER-CONTINUED
Q. Given today's slow-growth economy and a market that places huge premiums on
the shares of growing companies, how do you find growth at reasonable prices?
A. While it is difficult now to find both growth and value in the same stock,
we have identified five themes that offer the opportunity to buy when prices
are low.
The first theme we call "growth in disguise"--a phrase my grandfather often
used. It includes companies that are not known as growth companies but that
have been transformed into growth companies by fundamental changes in their
markets or the economy. This theme would encompass financial services
companies, which are benefiting from favorable long-term demographic trends as
baby boomers enter their peak earning and investing years. It would also
include oil services companies, which are now emerging from a 17-year bear
market.
The second theme is "growth under a cloud". Short-term disappointments or
controversy can mask a company's strong long-term prospects. We believe this
may be the case with McDonald's, which is struggling domestically but has a
dominant international brand position.(9)
A third theme is "restructured growth". This theme has been played across
American industry in the last 10 years, and was certainly evident with IBM and
American Express, both large holdings of ours.9
A fourth theme is "growth delayed". This refers to companies with the enviable
problem of having so much business that temporary bottlenecks hurt near-term
results. Burlington Northern and Boeing, for example, have been caught by
surprise at the strength of their businesses, and that has created short-term
operating problems. Hopefully, a year from now investors will realize that
these times were really buying opportunities.
The final theme is "volatile growth". Technology is truly one of the great
growth engines of our economy, with the use of technology expanding at a
staggering rate every year while its price is cut in half. Because of high
growth rates, short-term results may be volatile. But, as mentioned above,
volatility is often an investor's ally.
Q. What is your long-term outlook?
A. Fundamentally, we remain optimists, but we believe that investors must
moderate their expectations. The kind of results the market has posted in the
last three years cannot continue, based on the value of the underlying
businesses. However, this is not necessarily bad news. In fact, between 1966
and 1997, the Dow Jones Industrial Average, excluding dividends, compounded at
only 7%--a rate far below what many would guess. Yet if even this modest growth
rate were sustained for the next 30 years, the Dow would trade at 64,000. So
more moderate expectations need not be cause for despair!
- -------------------------
4
<PAGE>
DAVIS NEW YORK VENTURE FUND, INC.
P.O. Box 1688, 124 East Marcy Street
Santa Fe, New Mexico 87501
===============================================================================
MANAGEMENT'S DISCUSSION AND ANALYSIS-CONTINUED
This Semi-Annual Report is furnished to you by Davis Distributors, LLC, which
acts as the distributor for the Davis New York Venture Fund. This Semi-Annual
Report is authorized for distribution only when accompanied or preceded by a
current prospectus of the Davis New York Venture Fund which contains more
information about fees and expenses. Please read the prospectus carefully
before investing or sending money.
(1) Neither dollar cost averaging, nor any other mechanical system can
guarantee a profit. Such a plan does not protect against loss in declining
markets.
(2) Definition of Indices:
I. The Dow Jones Industrial Average is a price-weighted average of 30 actively
traded blue chip stocks. The Dow Jones is calculated by adding the closing
prices of the component stocks and using a divisor that is adjusted for splits
and stock dividends equal to 10% or more of the market value of an issue as
well as substitutions and mergers. The average is quoted in points, not in
dollars. Over the past 30 years the Dow Jones Industrial Average increased at
an average annual rate of approximately 7% without reinvesting dividends. Past
performance is not a guarantee of future results.
II. The S&P 500 Index is an unmanaged index of 500 selected common stocks, most
of which are listed on the New York Stock Exchange. The index is adjusted for
dividends, weighted towards stocks with large market capitalizations and
represents approximately two-thirds of the total market value of all domestic
common stocks. Investments cannot be made directly in the S&P 500 Index.
III. Lipper Growth Fund Index is composed of funds that normally invest in
companies with long-term earnings expected to grow significantly faster than
the earnings of the stocks represented in the major unmanaged stock indices.
(3) Total return assumes reinvestment of dividends and capital gain
distributions. Past performance is not a guarantee of future results.
Investment return and principal value will vary so that, when redeemed, an
investor's shares may be worth more or less than when purchased.
<TABLE>
* (Without a 4.75% Load taken into consideration for the period ended January 31, 1998)
<CAPTION>
FUND NAME 6 MONTH 1 YEAR 5 YEAR 10 YEAR INCEPTION
<S> <C> <C> <C> <C> <C>
New York Venture A .42% 23.75% 21.00% 20.32% 14.96% - 02/17/69
<CAPTION>
** (With a 4.75% Load taken into consideration for the period ended January 31, 1998)
FUND NAME 6 MONTH 1 YEAR 5 YEAR 10 YEAR INCEPTION
<S> <C> <C> <C> <C> <C>
New York Venture A -4.34% 17.87% 19.83% 19.74% 14.76% - 02/17/69
</TABLE>
(4) Since its inception, the Davis New York Venture Fund ranked 3 out of
75 funds in the Lipper "Growth Funds" category. For the one year period ended
12/31/97, the Davis New York Venture Fund ranked 82nd among the 820 funds, for
three years it was 15th among 511 funds, for five years it was 18th among 311
funds, for ten years it ranked 6th among 181 funds, for fifteen years it ranked
2nd among 116 funds, for twenty years it was 4th among 103 funds and for
twenty-five years it ranked 8th out of 96 funds in the Lipper "Growth Funds"
category.
5
<PAGE>
DAVIS NEW YORK VENTURE FUND, INC.
P.O. Box 1688, 124 East Marcy Street
Santa Fe, New Mexico 87501
===============================================================================
MANAGEMENT'S DISCUSSION AND ANALYSIS-CONTINUED
(5) Source: U.S. News & World Report, February 2, 1998 using Kanon Bloch
Carre', a Boston consulting firm. The firm uses an "overall performance index,"
or OPI. A fund's OPI is a measure both of its investment returns over the past
1, 3 5, and 10 years (relative to similar funds) and its overall volatility -
the extent to which returns have moved up and down. Each fund is also graded on
"downside volatility" (how often it has lost ground and how much ground was
lost) and on how it compared with its peers during recent market drops. Funds
are ranked in each of 22 categories and a fund has to be at least three years
old as of 12/31/97 with assets of $25 million or more and has to be accessible
to average investors; funds requiring minimum investments of $100,000 or more
are excluded.
(6) Morningstar proprietary ratings reflect historical risk-adjusted
performance as of January 31, 1998. The ratings are subject to change every
month, Morningstar ratings are calculated from a fund's 3, 5 and 10 year
average annual returns (based on available track records) in excess of 90-day
Treasury bill (T-bill) returns, with appropriate fee adjustments and a risk
factor that reflects fund performance below 90-day T-bill returns. Ten percent
of the funds in an investment category receive five stars, the next 22.5%
receive four stars, the next 35% receive three stars, the next 22.5% receive
two stars, and the next 10% receive one star. The Class A shares of the Davis
New York Venture Fund received five stars (among 680 funds) for the 10-year
period, four stars (among 1,315 funds) for the five-year period, and four stars
(among 2,364 funds) for the three-year period. Star ratings for the fund's
other classes of shares may vary and are available only for those classes with
at least three years of performance history. Past performance is no guarantee
of future results.
(7) Source: Morningstar Mutual Funds, December 5, 1997.
(8) For a transcript of Mr. Buffet's comments, we suggest subscribing to
Outstanding Investor Digest.
(9) Portfolio holdings are subject to change.
6
<PAGE>
DAVIS NEW YORK VENTURE FUND, INC.
SCHEDULE OF INVESTMENTS
January 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
=============================================================================================================
VALUE
SHARES SECURITY (NOTE 1)
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK - (88.11%)
AEROSPACE - (0.85%)
1,483,000 Boeing Co........................................................... $ 70,535,188
-----------------
AGRICULTURE - (1.14%)
3,989,571 Archer-Daniels-Midland Co........................................... 84,030,339
344,400 Corn Products International, Inc. ................................... 11,020,800
-----------------
95,051,139
-----------------
BANKS AND SAVINGS & LOANS - (12.71%)
1,779,643 Banc One Corp....................................................... 99,437,553
2,993,400 BankAmerica Corp.................................................... 212,718,488
1,752,171 Citicorp............................................................ 208,508,349
30,000 First Union Corp.................................................... 1,441,875
474,400 Golden West Financial Corp. ........................................ 40,057,150
21,494 NationsBank Corp. .................................................. 1,289,625
1,035,100 State Street Corp................................................... 57,965,600
582,000 TCF Financial Corporation........................................... 18,587,625
853,700 U.S. Bancorp........................................................ 93,480,150
1,053,100 Wells Fargo & Co.................................................... 325,407,900
-----------------
1,058,894,315
-----------------
BUILDING MATERIALS - (3.14%)
2,348,500 Martin Marietta Material, Inc....................................... 89,243,000
3,494,700 Masco Corporation................................................... 172,113,975
-----------------
261,356,975
-----------------
CHEMICALS - (0.01%)
6,000 Dow Chemical Co..................................................... 540,000
-----------------
CONSUMER PRODUCTS - (5.23%)
80,200 Coca-Cola Company................................................... 5,192,950
30,000 Fortune Brands, Inc................................................. 1,147,500
30,000 Gallaher Group PLC - ADR*........................................... 693,750
15,640 Nestle S.A. (Switzerland) ADR (144A)................................ 1,247,992
10,800 Nestle S.A. (Switzerland)........................................... 17,168,887
2,002,600 Nestle S.A. (Switzerland) (Sponsored ADR for Reg. Shrs.)............ 159,797,267
1,932,600 Nike, Inc........................................................... 77,424,788
4,168,800 Philip Morris Cos., Inc............................................. 173,005,200
-----------------
435,678,334
-----------------
DIVERSIFIED - (0.07%)
80,240 General Electric Co................................................. 6,218,600
-----------------
</TABLE>
7
<PAGE>
DAVIS NEW YORK VENTURE FUND, INC.
SCHEDULE OF INVESTMENTS - Continued
January 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
=============================================================================================================
VALUE
SHARES SECURITY (NOTE 1)
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK - CONTINUED
DIVERSIFIED FINANCIAL SERVICES - (6.43%)
2,967,000 American Express Co................................................. $ 248,300,813
2,205,600 Freddie Mac ........................................................ 98,149,200
3,817,681 Travelers Group Inc................................................. 188,975,210
-----------------
535,425,223
-----------------
ELECTRONICS - (3.82%)
3,281,600 Applied Materials, Inc. ........................................... 107,574,950
680,874 Molex Incorporated.................................................. 18,596,371
3,518,000 Texas Instruments Inc............................................... 192,170,750
-----------------
318,342,071
-----------------
ENERGY - (9.32%)
13,200 Amerada Hess Corp. ................................................. 721,875
9,600 Amoco Corp. ........................................................ 781,200
32,200 Atlantic Richfield Co. ............................................. 2,394,875
532,858 British Petroleum Company PLC - ADR................................. 42,795,158
2,755,000 Burlington Resources, Inc........................................... 117,776,250
52,200 Chevron Corp........................................................ 3,905,213
1,392,300 Cooper Cameron Corp.*............................................... 71,616,431
1,342,340 EVI, Inc.*.......................................................... 54,196,978
160,800 Exxon Corp.......................................................... 9,537,450
3,276,700 Halliburton Co...................................................... 147,246,706
358,500 McDermott International, Inc. ...................................... 11,427,188
446,400 J. Ray McDermott, S.A............................................... 15,986,700
16,000 Mobil Corp.......................................................... 1,090,000
290,300 Nabors Industries, Inc.*............................................ 6,949,056
1,621,870 Noble Affiliates, Inc......................................... 58,995,521
1,102,500 Pioneer Natural Res................................................. 23,910,469
1,939,200 Schlumberger Ltd.................................................... 142,894,800
1,282,600 Smith International Inc.*........................................... 63,649,025
16,000 Sonat, Inc.......................................................... 699,000
-----------------
776,573,895
-----------------
FOOD & RESTAURANT - (3.47%)
5,435,400 McDonald's Corp..................................................... 256,143,225
1,805,000 Tyson Foods, Inc.................................................... 32,602,813
-----------------
288,746,038
-----------------
INTERNATIONAL CLOSED-END INVESTMENT COMPANY - (0.33%)
3,284,900 Morgan Stanley Asia Pacific Fund Inc................................ 27,511,038
-----------------
</TABLE>
8
<PAGE>
DAVIS NEW YORK VENTURE FUND, INC.
SCHEDULE OF INVESTMENTS - Continued
January 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
=============================================================================================================
VALUE
SHARES SECURITY (NOTE 1)
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK - CONTINUED
INVESTMENT FIRMS - (3.54%)
692,500 Donaldson, Lufkin & Jenrette, Inc................................... $ 48,691,406
531,300 J.P. Morgan & Co., Inc.............................................. 53,760,919
3,294,190 Morgan Stanley, Dean Witter & Discover Co........................... 192,298,341
-----------------
294,750,666
-----------------
LIFE INSURANCE - (1.25%)
2,586,475 SunAmerica, Inc..................................................... 103,943,964
-----------------
MANUFACTURING - (0.01%)
30,000 Maytag Corp......................................................... 1,153,125
-----------------
MARKETING - (0.00%)
1,666 ACNielsen Corp.*.................................................... 36,027
-----------------
PAPER PRODUCTS - (0.02%)
12,000 International Paper Co.............................................. 548,250
16,300 Union Camp Corp..................................................... 932,156
-----------------
1,480,406
-----------------
PHARMACEUTICAL AND HEALTH CARE - (6.07%)
517,000 American Home Products Corp. ....................................... 49,341,188
335,000 Bristol-Myers Squibb Co............................................. 33,395,313
5,000 Cognizant Corp..................................................... 226,875
391,200 Eli Lilly & Co...................................................... 26,406,000
364,900 Johnson & Johnson................................................... 24,425,494
164,500 Merck & Co., Inc.................................................... 19,287,625
820,300 Novartis AG - ADR................................................... 70,084,381
1,203,200 Pfizer, Inc......................................................... 98,587,200
2,917,600 SmithKline Beecham PLC - ADR........................................ 183,991,150
-----------------
505,745,226
-----------------
PROPERTY/CASUALTY INSURANCE - (7.83%)
1,180,358 The Allstate Corp................................................... 104,461,683
359,887 American International Group, Inc................................... 39,700,035
1,158,050 W.R. Berkley Corp................................................... 47,552,428
1,043,300 Chubb Corp.......................................................... 79,225,594
1,055,200 General Re Corp..................................................... 219,613,500
581,600 Progressive Corp. (Ohio)............................................ 63,612,500
826,700 Transatlantic Holdings Inc.......................................... 59,160,719
847,100 20th Century Industries, Inc........................................ 23,507,025
323,300 UNUM Corp........................................................... 15,720,463
-----------------
652,553,947
-----------------
</TABLE>
9
<PAGE>
DAVIS NEW YORK VENTURE FUND, INC.
SCHEDULE OF INVESTMENTS - Continued
January 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
=============================================================================================================
VALUE
SHARES SECURITY (NOTE 1)
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK - CONTINUED
PUBLISHING - (2.24%)
5,000 Dun & Bradstreet Corp.............................................. $ 159,375
1,224,700 Gannett Co., Inc.................................................... 74,094,350
976,100 Harcourt General, Inc............................................... 52,038,331
972,400 The News Corporation Limited - ADR.................................. 24,188,450
581,600 Tribune Co.......................................................... 35,332,200
1,000 Washington Post Co., Class B........................................ 487,000
-----------------
186,299,706
-----------------
REAL ESTATE - (3.79%)
293,560 Crescent Operating, Inc.*........................................... 5,935,416
2,935,700 Crescent Real Estate Equities, Inc.................................. 103,116,463
310,000 Federal Realty Investment Trust..................................... 7,672,500
1,944,500 General Growth Properties........................................... 71,460,375
70,700 Kimco Realty Corp................................................... 2,439,150
2,039,700 Rouse Company....................................................... 68,584,913
344,300 United Dominion Realty Trust, Inc................................... 4,777,163
1,048,800 Vornado Realty Trust................................................ 47,720,400
100,700 Weingarten Realty, Investors........................................ 4,430,800
-----------------
316,137,180
-----------------
SATELLITE TELECOMMUNICATIONS - (0.24%)
144,256 Global Star Telecommunications*..................................... 8,213,576
546,000 Loral Space & Communications*....................................... 12,046,125
-----------------
20,259,701
-----------------
TECHNOLOGY - (8.48%)
4,665,200 Hewlett-Packard Co.................................................. 279,912,000
1,022,700 Intel Corp.......................................................... 82,870,659
2,664,400 International Business Machines Corp................................ 262,942,975
2,234,500 Novellus Systems, Inc.*............................................. 80,651,484
-----------------
706,377,118
-----------------
TELECOMMUNICATIONS - (4.31%)
2,687,000 AirTouch Communications, Inc.*...................................... 117,892,125
2,305,300 Motorola, Inc....................................................... 137,021,269
850,300 Qwest Communications International, Inc. ........................... 60,477,588
10,000 SBC Communications, Inc............................................. 777,500
1,941,100 360 (Degree) Communication Company*................................. 42,582,881
-----------------
358,751,363
-----------------
TRANSPORTATION - (3.78%)
1,954,600 Burlington Northern Santa Fe Corp................................... 169,561,550
1,374,450 Illinois Central Corp............................................... 45,700,463
1,660,300 Union Pacific Corp.................................................. 99,618,000
-----------------
314,880,013
-----------------
</TABLE>
10
<PAGE>
DAVIS NEW YORK VENTURE FUND, INC.
SCHEDULE OF INVESTMENTS - Continued
January 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
==============================================================================================================
VALUE
SHARES/PRINCIPAL SECURITY (NOTE 1)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK - CONTINUED
UTILITIES - (0.03%)
10,000 Carolina Power & Light Co. ......................................... $ 406,250
12,000 Duke Power Corp..................................................... 650,250
12,000 Edison International ............................................... 322,500
8,000 Enova Corp. ........................................................ 203,000
6,000 New England Electric System......................................... 252,000
16,800 Southern Co. ....................................................... 408,450
9,000 Wisconsin Energy Corp. ............................................. 248,063
-----------------
2,490,513
-----------------
WASTE MANAGEMENT - (0.00%)
12,000 Waste Management Inc................................................ 282,000
-----------------
Total Common Stocks - (identified cost $ 5,288,245,330)........ 7,340,013,771
-----------------
PREFERRED STOCK - (0.44%)
162,856 AirTouch Communications, Inc., 4.25%, Ser. C Conv. Pfd.............. 10,728,139
50,200 Banc One Corp., $3.50, Ser. C Conv. Pfd............................. 5,415,325
200,600 Devon Financing Trust, 6.50%, Conv. Pfd............................. 13,540,500
65,200 Rouse Co., Ser. B Conv. Pfd......................................... 3,357,800
60,200 Vornado Realty Trust, 6.50%, Ser. A Conv. Pfd....................... 3,958,150
-----------------
Total Preferred Stocks - (identified cost $30,156,691)......... 36,999,914
-----------------
SHORT TERM INVESTMENTS - (11.07%)
$ 20,000,000 Federal Farm Credit Bank Discount Note, 5.42%, 02/10/98.............. 19,969,889
50,000,000 Federal Home Loan Bank Discount Note, 5.37%, 02/04/98............... 49,970,167
28,150,000 Federal Home Loan Bank Discount Note, 5.35%, 02/11/98............... 28,103,983
35,775,000 Federal Home Loan Bank Discount Note, 5.66%, 02/13/98............... 35,701,880
16,140,000 Federal Home Loan Bank Discount Note, 5.34%, 02/23/98............... 16,084,936
32,930,000 Federal Home Loan Mortgage Corporation Discount Note,
5.36%, 02/03/98................................................ 32,915,291
27,350,000 Federal Home Loan Mortgage Corporation Discount Note,
5.32%, 02/05/98................................................ 27,329,791
9,660,000 Federal Home Loan Mortgage Corporation Discount Note,
5.64%, 02/06/98................................................ 9,650,920
</TABLE>
11
<PAGE>
DAVIS NEW YORK VENTURE FUND, INC.
SCHEDULE OF INVESTMENTS - Continued
January 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
===============================================================================================================
VALUE
PRINCIPAL SECURITY (NOTE 1)
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
SHORT TERM INVESTMENTS - CONTINUED
$ 30,000,000 Federal Home Loan Mortgage Corporation Discount Note,
5.34%, 02/17/98................................................ $ 29,924,350
24,325,000 Federal Home Loan Mortgage Corporation Discount Note,
5.41%, 02/19/98................................................ 24,255,545
35,000,000 Federal Home Loan Mortgage Corporation Discount Note,
5.37%, 02/20/98................................................ 34,895,583
50,000,000 Federal Home Loan Mortgage Corporation Discount Note,
5.39%, 02/24/98................................................ 49,820,333
35,000,000 Federal Home Loan Mortgage Corporation Discount Note,
5.42%, 02/26/98................................................ 34,862,994
50,000,000 Federal Home Loan Mortgage Corporation Discount Note,
5.38%, 03/05/98................................................ 49,753,417
18,515,000 Federal Home Loan Mortgage Corporation Discount Note,
5.35%, 03/06/98................................................ 18,421,448
36,845,000 Federal Home Loan Mortgage Corporation Discount Note,
5.38%, 03/10/98................................................ 36,635,761
22,525,000 Federal Home Loan Mortgage Corporation Discount Note,
5.32%, 03/12/98................................................ 22,391,852
35,000,000 Federal Home Loan Mortgage Corporation Discount Note,
5.36%, 03/16/98................................................ 34,770,711
17,900,000 Federal Home Loan Mortgage Corporation Discount Note,
5.33%, 03/20/98................................................ 17,772,791
30,000,000 Federal Home Loan Mortgage Corporation Discount Note,
5.375%, 03/26/98............................................... 29,758,125
38,540,000 Federal Home Loan Mortgage Corporation Discount Note,
5.36%, 03/31/98................................................ 38,201,448
46,400,000 Federal National Mortgage Association Discount Note,
5.35%, 02/02/98................................................ 46,386,209
44,070,000 Federal National Mortgage Association Discount Note,
5.43%, 02/09/98................................................ 44,010,175
30,000,000 Federal National Mortgage Association Discount Note,
5.43%, 02/10/98................................................ 29,954,750
28,950,000 Federal National Mortgage Association Discount Note,
5.65%, 02/12/98................................................ 28,895,478
15,401,000 Federal National Mortgage Association Discount Note,
5.34%, 02/18/98................................................ 15,359,879
41,960,000 Federal National Mortgage Association Discount Note,
5.42%, 02/25/98................................................ 41,802,067
49,950,000 Federal National Mortgage Association Discount Note,
5.62%, 02/27/98................................................ 49,739,461
</TABLE>
12
<PAGE>
DAVIS NEW YORK VENTURE FUND, INC.
SCHEDULE OF INVESTMENTS - Continued
January 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
===============================================================================================================
VALUE
PRINCIPAL SECURITY (NOTE 1)
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
SHORT TERM INVESTMENTS - CONTINUED
$ 17,400,000 Federal National Mortgage Association Discount Note,
5.33%, 03/24/98................................................ $ 17,266,039
7,750,000 Federal National Mortgage Association Discount Note,
5.38%, 03/27/98................................................ 7,686,299
-----------------
Total Short Term Investments -
(identified cost $922,291,572)............................. 922,291,572
-----------------
Total Investments - (identified cost $6,240,693,593)(99.62%)(a) 8,299,305,257
Other Assets Less Liabilities- (0.38%)......................... 31,512,153
-----------------
Net Assets - (100%)................................... $ 8,330,817,410
=================
</TABLE>
<TABLE>
(a) Aggregate cost for Federal Income Tax purposes is $6,240,666,300. At
January 31, 1997 unrealized appreciation (depreciation) of securities for
Federal Income Tax purposes was as follows:
<S> <C>
Unrealized appreciation............................................. $ 2,148,632,373
Unrealized depreciation............................................. (89,993,416)
-----------------
Net appreciation............................................... $ 2,058,638,957
=================
</TABLE>
* Non-Income Producing Security
SEE NOTES TO FINANCIAL STATEMENTS
13
<PAGE>
DAVIS NEW YORK VENTURE FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
At January 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
==============================================================================================================
<S> <C>
ASSETS:
Investments in securities, at value (identified cost $6,240,693,593) (Note 1)........ $ 8,299,305,257
Cash................................................................................. 634,931
Receivables:
Capital stock sold............................................................... 74,086,961
Dividends and interest........................................................... 5,775,821
Note receivable (Note 7)............................................................. 1,500,000
Other assets......................................................................... 86,864
-----------------
Total assets................................................................ $ 8,381,389,834
----------------
LIABILITIES:
Payables:
Investment securities purchased.................................................. 32,369,750
Capital stock reacquired......................................................... 11,382,638
Accrued expenses..................................................................... 6,744,217
Other liabilities.................................................................... 75,819
-----------------
Total liabilities........................................................... 50,572,424
-----------------
NET ASSETS ............................................................................... $ 8,330,817,410
=================
NET ASSETS CONSIST OF:
Deficit in undistributed net investment income....................................... $ (21,235,148)
Unrealized appreciation on investments............................................... 2,058,611,664
Accumulated net realized gains from investments and foreign currency transactions.. 12,177,033
Paid-in capital...................................................................... 6,281,263,861
-----------------
Net assets.................................................................. $ 8,330,817,410
=================
CLASS A SHARES
Net assets....................................................................... $ 4,847,166,073
Shares outstanding............................................................... 220,743,794
Net asset value and redemption price per share (net assets/shares outstanding)... $ 21.96
=========
Maximum offering price per share (100/95.25 of $21.96)........................... $ 23.06
=========
CLASS B SHARES
Net assets....................................................................... $ 1,880,944,372
Shares outstanding............................................................... 86,380,901
Net asset value and redemption price per share (net assets/shares outstanding)... $ 21.78
=========
CLASS C SHARES
Net assets....................................................................... $ 861,696,620
Shares outstanding............................................................... 39,437,410
Net asset value and redemption price per share (net assets/shares outstanding)... $ 21.85
=========
CLASS Y SHARES
Net assets....................................................................... $ 741,010,345
Shares outstanding............................................................... 33,459,027
Net asset value and redemption price per share (net assets/shares outstanding)... $ 22.15
=========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
14
<PAGE>
DAVIS NEW YORK VENTURE FUND, INC.
STATEMENT OF OPERATIONS
For the six months ended January 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
==============================================================================================================
<S> <C> <C>
INVESTMENT INCOME:
Income:
Dividends........................................................................ $ 44,639,090
Interest ........................................................................ 21,939,256
-----------------
Total income............................................................. 66,578,346
Expenses:
Management fees (Note 3)........................................ $ 19,723,363
Custodian fees.................................................. 581,908
Transfer agent fees
Class A.................................................... 2,232,279
Class B.................................................... 1,726,004
Class C.................................................... 463,268
Class Y.................................................... 1,372
Audit fees...................................................... 20,806
Legal fees...................................................... 83,257
Accounting fees (Note 3)........................................ 216,666
Reports to shareholders......................................... 267,169
Directors fees and expenses..................................... 98,303
Registration and filing fees.................................... 656,161
Miscellaneous................................................... 40,517
Service fees paid under distribution plan (Note 4)
Class A.................................................... 4,301,001
Class B.................................................... 7,585,329
Class C.................................................... 3,535,837
---------------
Total expenses.......................................................... 41,533,240
Fee Reduction (Note 6)........................................................... (31,998)
-----------------
Net expenses................................................................ 41,501,242
-----------------
Net investment income................................................... 25,077,104
-----------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain (loss) from:
Investment transactions.......................................................... 97,190,449
Foreign currency transactions................................................... (1,408)
Net decrease in unrealized appreciation of
investments during the year..................................................... (98,834,741)
-----------------
Net realized and unrealized gain (loss) on investments............................... (1,645,700)
-----------------
Net increase in net assets resulting from operations.................... $ 23,431,404
=================
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
15
<PAGE>
DAVIS NEW YORK VENTURE FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
==============================================================================================================
SIX
MONTHS ENDED
JANUARY 31, YEAR ENDED
1998 JULY 31,
(UNAUDITED) 1997
----------- ----
<S> <C> <C>
OPERATIONS:
Net investment income............................................. $ 25,077,104 $ 31,227,796
Net realized gain from investments and
foreign currency transactions................................ 97,189,041 284,576,600
Increase (decrease) in unrealized appreciation of investments.... (98,834,741) 1,574,058,965
---------------- -----------------
Net increase in net assets resulting
from operations.......................................... 23,431,404 1,889,863,361
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
Class A ($0.23 and $0.18 per share, respectively)............. (44,770,304) (26,255,863)
Class B ($0.05 and $0.04 per share, respectively)............. (3,420,375) (1,030,857)
Class C ($0.06 and $0.04 per share, respectively)............. (1,903,316) (466,410)
Class Y ($0.29 and $0.06 per share, respectively)............. (8,520,852) (154,449)
Realized gains from investment transactions:
Class A ($0.83 and $0.70 per share, respectively)............. (161,900,484) (102,106,133)
Class B ($0.83 and $0.70 per share, respectively)............. (58,984,889) (18,040,009)
Class C ($0.83 and $0.70 per share, respectively)............. (27,202,211) (8,162,177)
Class Y ($0.83 and $0.70 per share, respectively)............. (24,556,619) (1,801,897)
CAPITAL SHARE TRANSACTIONS (NOTE 5).................................... 2,280,732,664 2,068,532,408
---------------- -----------------
Total increase in net assets.................................. 1,972,905,018 3,800,377,974
NET ASSETS:
Beginning of year................................................. 6,357,912,392 2,557,534,418
---------------- -----------------
End of year (including undistributed net income (deficit) of
$ (21,235,148) and $12,302,594, respectively)..................... $ 8,330,817,410 $ 6,357,912,392
================ =================
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
16
<PAGE>
DAVIS NEW YORK VENTURE FUND, INC.
NOTES TO FINANCIAL STATEMENTS
January 31, 1998 (Unaudited)
===============================================================================
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Fund is registered under the Investment Company Act of 1940, as
amended, as a diversified, open-end management investment company. The Fund's
investment objective is growth of capital. The Fund invests primarily in common
stocks. There is no assurance that the investment objective of the Fund will be
achieved. The Fund invests in securities subject to the risk of price
fluctuations reflecting both market evaluations of the businesses involved and
general changes in the equity markets. The Fund may invest in securities of
foreign issuers and hedge currency fluctuation risks related thereto. The Fund
offers shares in four classes, Class A, Class B, Class C and Class Y. The Class
A shares are sold with a front-end sales charge and the Class B and Class C
shares are sold at net asset value and may be subject to a contingent deferred
sales charge upon redemption. Class Y shares are sold at net asset value and
are not subject to any contingent deferred sales charge. Class Y shares are
only available to certain qualified investors. All classes have identical
rights with respect to voting (exclusive of each Class's distribution
arrangement), liquidation and distributions. The following is a summary of
significant accounting policies followed by the Fund in the preparation of its
financial statements.
SECURITY VALUATION - Securities traded on national securities exchanges are
valued at the published last sales prices on the exchange, or, in the absence
of recorded sales, at the average of closing bid and asked prices on such
exchange. Over-the-counter securities are valued at the average of closing bid
and asked prices. If no quotations are available, the fair value of the
investment is determined by or at the direction of the Board of Directors.
Investments in short-term securities (maturing in sixty days or less) are
valued at amortized cost unless the Board of Directors determines that such
cost is not a fair value.
FEDERAL INCOME TAXES - It is the Fund's policy to comply with the requirements
of the Internal Revenue Code applicable to regulated investment companies and
to distribute substantially all of its taxable income to shareholders.
Therefore, no provision for federal income tax is required.
SECURITIES TRANSACTIONS AND RELATED INVESTMENT INCOME - Securities transactions
are accounted for on the trade date (date the order to buy or sell is executed)
with gain or loss on the sale of securities being determined based upon
identified cost. Dividend income is recorded on the ex-dividend date and
interest income is recorded on the accrual basis.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS - Dividends and distributions to
shareholders are recorded on the ex-dividend date.
NOTE 2 - PURCHASES AND SALES OF SECURITIES
Purchases and sales of investment securities (excluding short-term
securities) for the six months ended January 31, 1998, were $1,834,084,203 and
$316,154,962, respectively.
17
<PAGE>
DAVIS NEW YORK VENTURE FUND, INC.
NOTES TO FINANCIAL STATEMENTS - Continued
January 31, 1998 (Unaudited)
===============================================================================
NOTE 3 - INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Advisory fees are paid monthly to the investment adviser at the annual
rate of .75% of the average daily net assets for the first $250 million, .65%
of the average daily net assets on the next $250 million, .55% of the average
daily net assets on the next $2.5 billion, .54% of the average daily net assets
on the next $1 billion, .53% of the average daily net assets on the next $1
billion, .52% of the average daily net assets on the next $1 billion, .51% of
the average daily net assets on the next $1 billion and .50% of the average
daily net assets in excess of $7 billion.
The Adviser is paid for registering Fund shares for sale in various
states. The fee for the six months ended January 31, 1998 amounted to $7,002.
The Adviser is also paid for certain transfer agent services. The fee for the
six months ended January 31, 1998 amounted to $398,774. The Adviser is also
paid for certain accounting services. The fee amounted to $216,666 for the six
months ended January 31, 1998. Certain directors and the officers of the Fund
are also directors and officers of the general partner of the Adviser.
Davis Selected Advisers-NY, Inc. ("DSA-NY"), a wholly-owned subsidiary of
the Adviser, acts as sub-adviser to the Fund. DSA-NY performs research and
portfolio management services for the Fund under a Sub-Advisory Agreement with
the Adviser. The Fund pays no fees directly to DSA-NY.
The Fund has adopted procedures to treat Shelby Cullom Davis & Co.
("SCD") as an affiliate of the Adviser. During the six months ended January 31,
1998, SCD received $163,338 in commission on the purchases and sales of
portfolio securities in the Fund.
NOTE 4 - DISTRIBUTION AND UNDERWRITING FEES
CLASS A SHARES
Class A shares of the Fund are sold at net asset value plus a sales
charge and are redeemed at net asset value (without a contingent deferred sales
charge).
During the six months ended January 31, 1998, Davis Distributors, LLC,
the Fund's Underwriter (the "Underwriter" or "Distributor") received
$17,094,135 from commissions earned on sales of Class A shares of the Fund, of
which $2,575,396 was retained by the Underwriter and the remaining $14,518,739
was reallowed to investment dealers. The Underwriter paid the costs of
prospectuses in excess of those required to be filed as part of the Fund's
registration statement, sales literature and other expenses assumed or incurred
by it in connection with such sales.
The Underwriter is reimbursed for amounts paid to dealers as a
maintenance fee with respect to Class A shares sold by dealers and remaining
outstanding during the period. The maintenance fee is paid at the annual rate
of 1/4 of 1% of the average net assets maintained by the responsible dealers.
The Underwriter is not reimbursed for accounts for which the Underwriter pays
no service fees to other firms. The maintenance fee for Class A shares of the
Fund for the six months ended January 31, 1998 was $4,301,001.
18
<PAGE>
DAVIS NEW YORK VENTURE FUND, INC.
NOTES TO FINANCIAL STATEMENTS - Continued
January 31, 1998 (Unaudited)
===============================================================================
NOTE 4 - DISTRIBUTION AND UNDERWRITING FEES - CONTINUED
CLASS B SHARES
Class B shares of the Fund are sold at net asset value and are redeemed
at net asset value less a contingent deferred sales charge if redeemed within
six years of purchase.
The Fund pays the Distributor a 4% commission on the proceeds from the
sale of the Fund's Class B shares and the Distributor reallows 4% to the
qualified dealer responsible for the sale of the shares. A rule implemented by
the National Association of Securities Dealers, Inc., ("NASD") limits the
percentage of the Fund's annual average net assets attributable to Class B
shares which may be used to reimburse the Distributor. The limit is 1%, of
which 0.75% may be used to pay distribution expenses and 0.25% may be used to
pay shareholder service fees. The NASD rule also limits the aggregate amount
the Fund may pay for distribution to 6.25% of gross Fund sales since inception
of the Rule 12b-1 plan plus interest at 1% over the prime rate on unpaid
amounts. The Distributor intends to seek full payment (plus interest at prime
plus 1%) of distribution charges that exceed the 1% annual limit in some future
period or periods when the plan limits have not been reached.
During the six months ended January 31, 1998, Class B shares of the Fund
made distribution plan payments which included commissions of $5,686,709 and
maintenance fees of $1,898,620.
Commissions earned by the Distributor during the six months ended
January 31, 1998 on the sale of Class B shares of the Fund amounted to
$28,560,103, of which $28,445,570 was reallowed to qualified selling dealers.
The Distributor intends to seek payment from Class B shares of the Fund
in the amount of $56,822,967, representing the cumulative commissions earned by
the Distributor on the sale of the Fund's Class B shares reduced by cumulative
commissions paid by the Fund and cumulative contingent deferred sales charges
paid by redeeming shareholders. The Fund has no contractual obligation to pay
any such distribution charges and the amount, if any, timing and condition of
such payment are solely within the discretion of the Directors who are not
interested persons of the Fund or the Distributor.
A contingent deferred sales charge is imposed upon redemption of
certain Class B shares of the Fund within six years of the original purchase.
The charge is a declining percentage starting at 4% of the lesser of net asset
value of the shares redeemed or the total cost of such shares. During the six
months ended January 31, 1998 the Distributor received $687,734 in contingent
deferred sales charges from Class B shares of the Fund.
CLASS C SHARES
Class C shares of the Fund are sold at net asset value and are
redeemed at net asset value less a contingent deferred sales charge of 1% if
redeemed within one year of purchase. The Fund pays the Distributor 1% of the
Fund's annual average net assets attributable to Class C shares, of which 0.75%
may be used to pay distribution expenses and 0.25% may be used to pay
shareholder service fees.
During the six months ended January 31, 1998, Class C shares of the
Fund made distribution payments of $3,535,837. During the six months ended
January 31, 1998, the Distributor received $169,116 in contingent deferred
sales charges from Class C shares of the Fund.
19
<PAGE>
DAVIS NEW YORK VENTURE FUND, INC.
NOTES TO FINANCIAL STATEMENTS - Continued
January 31, 1998 (Unaudited)
===============================================================================
NOTE 5 - CAPITAL STOCK
At January 31, 1998, there were 2,000,000,000 shares of capital stock
($0.05 par value per share) authorized. Transactions in capital stock were as
follows:
<TABLE>
<CAPTION>
CLASS A
SIX MONTHS ENDED
JANUARY 31, 1998 YEAR ENDED
(UNAUDITED) JULY 31, 1997
------------------------------- ------------------------------
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------
<S> <C> <C> <C> <C>
Shares subscribed.............................. 47,015,515 $ 1,056,848,384 62,568,994 $1,170,853,844
Shares issued in reinvestment of distributions. 8,250,974 183,666,618 5,802,406 102,355,058
------------- ---------------- ------------ ----------------
55,266,489 1,240,515,002 68,371,400 1,273,208,902
Shares reacquired.............................. (11,543,524) (258,713,043) (32,529,756) (595,232,360)
------------- ---------------- ----------- ----------------
Net increase.............................. 43,722,965 $ 981,801,959 35,841,644 $ 677,976,542
============= ================ ============ ================
<CAPTION>
CLASS B
SIX MONTHS ENDED
JANUARY 31, 1998 YEAR ENDED
(UNAUDITED) JULY 31, 1997
------------------------------ -----------------------------
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------
<S> <C> <C> <C> <C>
Shares subscribed.............................. 32,752,339 $ 728,752,838 35,141,408 $ 659,411,142
Shares issued in reinvestment of distributions. 2,676,782 59,183,581 710,105 12,448,299
------------ ---------------- ------------ ---------------
35,429,121 787,936,419 35,851,513 671,859,441
Shares reacquired (1,881,147) (41,648,481) (2,169,646) (39,943,226)
------------ ---------------- ------------ ---------------
Net increase.............................. 33,547,974 $ 746,287,938 33,681,867 $ 631,916,215
============ ================ ============ ===============
<CAPTION>
CLASS C
SIX MONTHS ENDED
JANUARY 31, 1998 YEAR ENDED
(UNAUDITED) JULY 31, 1997
------------------------------ -----------------------------
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------
<S> <C> <C> <C> <C>
Shares subscribed.............................. 14,325,006 $ 319,871,830 18,485,151 $ 345,126,337
Shares issued in reinvestment of distributions. 1,214,972 26,948,485 275,156 4,837,597
------------ ---------------- ------------ ---------------
15,539,978 346,820,315 18,760,307 349,963,934
Shares reacquired.............................. (1,335,124) (29,649,685) (1,280,225) (23,652,939)
------------ ---------------- ------------ ---------------
Net increase.............................. 14,204,854 $ 317,170,630 17,480,082 $ 326,310,995
============ ================ ============ ===============
</TABLE>
20
<PAGE>
DAVIS NEW YORK VENTURE FUND, INC.
NOTES TO FINANCIAL STATEMENTS - Continued
January 31, 1998 (Unaudited)
===============================================================================
NOTE 5 - CAPITAL STOCK - CONTINUED
<TABLE>
<CAPTION>
CLASS Y
SIX MONTHS ENDED
JANUARY 31, 1998 YEAR ENDED
(UNAUDITED) JULY 31, 1997
------------------------------ -----------------------------
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------
<S> <C> <C> <C> <C>
Shares subscribed.............................. 10,932,202 $ 248,182,259 25,413,416 $ 480,571,559
Shares issued in reinvestment of distributions. 1,277,781 28,673,414 38,351 681,489
------------ ---------------- ------------ --------------
12,209,983 276,855,673 25,451,767 481,253,048
Shares reacquired.............................. (1,832,788) (41,383,536) (2,369,935) (48,924,392)
------------ ---------------- ------------ --------------
Net increase ........................ 10,377,195 $ 235,472,137 23,081,832 $ 432,328,656
============ ================ ============ ==============
</TABLE>
NOTE 6 - CUSTODY FEES
Under an agreement with the custodian bank, custody fees are reduced
by credits for cash balances. Such reductions amounted to $31,998 during the
six months ended January 31, 1998.
NOTE 7 - NOTE RECEIVABLE
At January 31, 1998, Davis New York Venture Fund owned a note
receivable from the Robert Plan Corporation in the amount of $1,500,000.
Principal plus accrued interest at 5% over the prime rate of The Chase
Manhattan Bank is payable in eight equal installments on January 31, 1997,
April 30, 1997, July 31, 1997, October 31, 1997, January 30, 1998, April 30,
1998, July 31, 1998 and October 30, 1998.
NOTE 8 - MATTERS SUBMITTED TO A VOTE OF SHAREHOLDERS
An annual meeting of shareholders was held on October 6, 1997. Matters
submitted for approval included ratification of the selection of Tait, Weller &
Baker as the Fund's auditors for the year ending July 31, 1998 and election of
Wesley E. Bass, Jr., Jeremy H. Biggs, Marc P. Blum, Andrew A. Davis,
Christopher C. Davis, Eugene M. Feinblatt, Jerry D. Geist, D. James Guzy, G.
Bernard Hamilton, LeRoy E. Hoffberger, Laurence W. Levine, Christian R. Sonne
and Edwin R. Werner as directors of the Fund. With respect to ratification of
the selection of auditors, 3,654,888,951 votes were cast in favor, 17,276,537
votes were cast against and 93,145,444 votes abstained. With respect to the
election of Mr. Bass, 3,700,554,098 votes were cast in favor 64,756,833 votes
were withheld. With respect to the election of Mr. Biggs, 3,706,632,673 votes
were cast in favor and 58,678,258 votes were withheld. With respect to the
election of Mr. Blum, 3,706,640,060 votes were cast in favor and 58,892,471
votes were withheld. With respect to the election of Mr. A. Davis,
3,706,010,625 votes were cast in favor and 59,300,306 votes were withheld. With
respect to the election of Mr. C. Davis, 3,705,312,937 votes were cast in favor
and 59,997,995 votes were withheld. With respect to the election of Mr.
Feinblatt, 3,705,444,690 votes were cast in favor and 59,866,242 votes were
withheld. With respect to the election of Mr. Geist, 3,703,475,015 votes were
cast in favor and 61,835,918 votes were withheld. With respect to the election
of Mr. Guzy, 3,706,590,296 votes were cast in favor and 58,720,635 votes were
withheld. With respect to the election of Mr. Hamilton, 3,705,909,835 votes
were cast in favor and 59,401,096 votes were withheld. With respect to the
election of Mr. Hoffberger, 3,706,132,275 votes were cast in favor and
59,178,651 votes were withheld. With respect to the election of Mr. Levine,
3,703,760,198 votes were cast in favor and 61,550,733 votes were withheld. With
respect to the election of Mr. Sonne, 3,704,194,874 votes were cast in favor
and 61,116,058 votes were withheld. With respect to the election of Mr. Werner,
3,703,036,934 votes were cast in favor and 62,273,998 votes were withheld.
21
<PAGE>
DAVIS NEW YORK VENTURE FUND, INC.
FINANCIAL HIGHLIGHTS
CLASS A
===============================================================================
Financial Highlights for a share of capital stock outstanding throughout each
period.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED JULY 31,
1/31/98 ---------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
----------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period..... $ 22.91 $ 15.24 $ 14.56 $ 12.04 $ 12.08 $ 10.70
--------- -------- -------- -------- -------- --------
Income From Investment Operations
- ---------------------------------
Net Investment Income............... .11 .18 .20 .14 .16 .10
Net Gains on Securities
(both realized and unrealized).... - 8.37 1.64 2.95 .54 1.98
--------- -------- -------- -------- -------- --------
Total From Investment Operations.. .11 8.55 1.84 3.09 .70 2.08
Less Distributions
- ------------------
Dividends (from net investment
income)........................... (.23) (.18) (.15) (.12) (.16) (.10)
Distributions from realized capital
gains............................. (.83) (.70) (1.01) (.45) (.58) (.59)
Distributions from paid in capital.. - - - - - (.01)
---------- --------- --------- --------- --------- ---------
Total Distributions.............. (1.06) (.88) (1.16) (.57) (.74) (.70)
---------- --------- --------- --------- --------- ---------
Net Asset Value, End of Period.......... $ 21.96 $ 22.91 $ 15.24 $ 14.56 $ 12.04 $ 12.08
========= ======== ======== ======== ======== ========
Total Return (1)......................... 0.42% 57.83% 13.04% 27.21% 5.99% 20.20%
- -------------
Ratios/Supplemental Data
- ------------------------
Net Assets, End of Period (000
omitted).......................... 4,847,166 4,054,767 2,151,444 1,594,885 1,076,779 738,698
Ratio of Expenses to Average Net
Assets........................... .91%* .89% .87% .90% .87% .89%
Ratio of Net Income to Average Net
Assets........................... .93%* .98% 1.30% 1.11% 1.19% .85%
Portfolio Turnover Rate............. 4.88% 23.54% 19% 15% 13% 24%
Average Commisison Rate per share... $.0600 $.0600 - - - -
</TABLE>
(1) Sales charges are not reflected in calculation.
* Annualized.
22
<PAGE>
DAVIS NEW YORK VENTURE FUND, INC.
FINANCIAL HIGHLIGHTS
CLASS B
===============================================================================
Financial Highlights for a share of capital stock outstanding throughout each
period.
<TABLE>
<CAPTION>
DECEMBER 1, 1994
SIX MONTHS (COMMENCEMENT
ENDED YEAR YEAR OF OPERATIONS)
1/31/98 ENDED ENDED THROUGH
(UNAUDITED) 7/31/97 7/31/96 7/31/95
----------- ------- ------- -------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 22.64 $ 15.08 $ 14.43 $ 10.88
-------- --------- --------- ----------
Income From Investment Operations
- ---------------------------------
Net Investment Income (Loss)....... .01 .01 .04 (.01)
Net Gains on Securities
(both realized and unrealized) ... .01 8.29 1.62 3.56
-------- --------- --------- ----------
Total From Investment Operations. .02 8.30 1.66 3.55
Less Distributions
- ------------------
Dividends (from net
investment income)............... (.05) (.04) - -
Distributions from realized
capital gains.................... (.83) (.70) (1.01) -
-------- --------- --------- ----------
Total Distributions............. (.88) (.74) (1.01) -
-------- --------- --------- ----------
Net Asset Value, End of Period......... $ 21.78 $ 22.64 $ 15.08 $ 14.43
======== ========= ========= ==========
Total Return (1) ....................... 0.02% 56.47% 11.81% 26.07%*
- ------------
Ratios/Supplemental Data
- ------------------------
Net Assets, End of Period
(000 omitted).................. 1,880,944 1,196,250 288,835 39,857
Ratio of Expenses to Average
Net Assets.................... 1.79%* 1.79%(2) 1.73% 1.78%*
Ratio of Net Income to Average
Net Assets.................... .05%* .07% .44% .23%*
Portfolio Turnover Rate............ 4.88% 23.54% 19% 15%
Average Commission Rate
par share...................... $.0600 $.0600 - -
</TABLE>
(1) Contingent deferred sales charges are not reflected in calculation.
(2) Ratio of expenses to average net assets after the reduction of custodian
fees under a custodian agreement was 1.78%. Prior to 1996, such reductions
were reflected in the expense ratios.
* Annualized.
23
<PAGE>
DAVIS NEW YORK VENTURE FUND, INC.
FINANCIAL HIGHLIGHTS
CLASS C
===============================================================================
Financial Highlights for a share of capital stock outstanding throughout each
period.
<TABLE>
<CAPTION>
DECEMBER 20, 1994
SIX MONTHS (COMMENCEMENT
ENDED YEAR YEAR OF OPERATIONS)
1/31/98 ENDED ENDED THROUGH
(UNAUDITED) 7/31/97 7/31/96 7/31/95
----------- ------- ------- -------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 22.72 $ 15.12 $ 14.47 $ 11.16
-------- -------- -------- -----------
Income From Investment Operations
- ---------------------------------
Net Investment Income (Loss)........ .02 .02 .04 (.01)
Net Gains on Securities
(both realized and unrealized..... - 8.32 1.62 3.32
-------- -------- -------- ------------
Total From Investment Operations.. .02 8.34 1.66 3.31
Less Distributions
- ------------------
Dividends (from net
investment income)................ (.06) (.04) - -
Distributions from realized
capital gains.................. (.83) (.70) (1.01) -
-------- -------- -------- ------------
Total Distributions.............. (.89) (.74) (1.01) -
-------- -------- -------- ------------
Net Asset Value, End of Period.......... $ 21.85 $ 22.72 $ 15.12 $ 14.47
======== ======== ======== ============
Total Return (1) ........................ 0.02% 56.59% 11.78% 26.42%*
- ----------------
Ratios/Supplemental Data
- ------------------------
Net Assets, End of Period
(000 omitted)................... 861,697 573,309 117,255 11,729
Ratio of Expenses to Average
Net Assets...................... 1.74%* 1.73% 1.73% 1.78%*
Ratio of Net Income to Average
Net Assets...................... .10%* .13% .44% .23%*
Portfolio Turnover Rate............. 4.88% 23.54% 19% 15%
Average Commission Rate
par share $.0600 $.0600 - -
</TABLE>
(1) Contingent deferred sales charges are not reflected in calculation.
* Annualized.
24
<PAGE>
DAVIS NEW YORK VENTURE FUND, INC.
FINANCIAL HIGHLIGHTS
===============================================================================
Financial Highlights for a share of capital stock outstanding throughout each
period.
<TABLE>
<CAPTION>
CLASS Y
OCTOBER 2, 1996
SIX MONTHS (COMMENCEMENT
ENDED OF OPERATIONS)
1/31/98 THROUGH
(UNAUDITED) 7/31/97
----------- -------
<S> <C> <C>
Net Asset Value, Beginning of Period................... $ 23.12 $ 16.66
-------- --------
Income From Investment Operations
- ---------------------------------
Net Investment Income............................. .12 .15
Net Gains on Securities (both realized and .03 7.07
unrealized)................................... -------- --------
Total From Investment Operations................ .15 7.22
Less Distributions
- ------------------
Dividends (from net investment income)............ (.29) (.06)
Distributions from realized capital gains......... (.83) (.70)
-------- --------
Total Distributions............................ (1.12) (.76)
-------- --------
Net Asset Value, End of Period......................... $ 22.15 $ 23.12
======== ========
Total Return .......................................... 0.58% 44.71%
- ------------
Ratios/Supplemental Data
- ------------------------
Net Assets, End of Period (000 omitted)........... 741,010 533,585
Ratio of Expenses to Average Net Assets.......... .62%* .62%*
Ratio of Net Income to Average Net Assets......... 1.22%* 1.19%*
Portfolio Turnover Rate........................... 4.88% 23.54%
Average Commission Rate par share................. $.0600 $.0600
</TABLE>
* Annualized.
25
<PAGE>
DAVIS NEW YORK
VENTURE FUND, INC.
124 East Marcy Street, Santa Fe, New Mexico 87501
===============================================================================
DIRECTORS OFFICERS
Wesley E. Bass, Jr. Jeremy H. Biggs
Jeremy H. Biggs Chairman
Marc P. Blum Shelby M. C. Davis
Andrew A. Davis President
Christopher C. Davis Kenneth C. Eich
Eugene M. Feinblatt Vice President
Jerry D. Geist Eileen R. Street
D. James Guzy Vice President,
G. Bernard Hamilton Treasurer & Assistant Secretary
LeRoy E. Hoffberger Thomas D. Tays
Laurence W. Levine Vice President& Secretary
Christian R. Sonne Christopher C. Davis
Vice President
Andrew A. Davis
Vice President
Carolyn H. Spolidoro
Vice President
Sharra L. Reed
Assistant Treasurer
& Assistant Secretary
INVESTMENT ADVISER
Davis Selected Advisers, L.P.
124 East Marcy Street
Santa Fe, New Mexico 87501
DISTRIBUTOR
Davis Distributors, LLC
124 East Marcy Street
Santa Fe, New Mexico 87501
TRANSFER AGENT & CUSTODIAN
State Street Bank and Trust Company
c/o The Davis Funds
P.O. Box 8406
Boston, Massachusetts 02266-8406
COUNSEL
D'Ancona & Pflaum
30 North LaSalle Street
Chicago, Illinois 60602
AUDITORS
KPMG Peat Marwick LLP
707 Seventeenth Street
Suite 2300
Denver, Colorado 80202
===============================================================================
FOR MORE INFORMATION ABOUT DAVIS NEW YORK VENTURE FUND, INC. INCLUDING
MANAGEMENT FEES, CHARGES AND EXPENSES, SEE THE CURRENT PROSPECTUS WHICH MUST
PRECEDE OR ACCOMPANY THIS REPORT.
===============================================================================
