PMD INVESTMENT COMPANY
SEMI-ANNUAL REPORT
June 30, 1996
PMD Investment Company
10050 Regency Circle
Suite, 315
Omaha, NE 68114
DIRECTORS AND OFFICERS
J.G. Sawicki President, Treasurer and Director
John Patrict Witherspoon Vice President and Director
H.B. Underwood Vice President, Secretary and Director
CUSTODIAN AND TRANSFER AGENT
First National Bank of Omaha
Trust Department
One First National Center
Omaha, Nebraska 68102-1596
INVESTMENT ADVISER
Commonwealth Investment Counsel, Inc.
Riverfront Plaza
901 East Byrd Street
Richmond, Virginia 23219
INDEPENDENT ACCOUNTANTS
Deloitte & Touche LLP
2000 First National Center
Omaha, Nebraska 68102
LEGAL COUNSEL
Abrahams, Kaslow & Cassman
8712 West Dodge Road, Suite 300
Omaha, Nebraska 68114
INDEPENDENT ACCOUNTANTS' REVIEW REPORT
To The Shareholders and
The Board of Directors
PMD Investment Company
Omaha, Nebraska
We have reviewed the accompanying statement of assets and
liabilities of PMD Investment Company, including the statement of
investments, as of June 30, 1996, and the related statements of
operations and changes in net assets for the six months then ended.
These financial statements are the responsibility of the Company's
management.
We conducted our review in accordance with standards established by
the American Institute of Certified Public Accountants. A review
of interim financial information consists principally of applying
analytical procedures to financial data and of making inquiries of
persons responsible for financial and accounting matters. It is
substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which
is the expression of an opinion regarding the financial statements
taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications
that should be made to the accompanying financial statements for
them to be in conformity with generally accepted accounting
principles.
Our review was conducted for the purpose of expressing limited
assurance that there are no material modifications that should be
made to the financial statements for them to be in conformity with
generally accepted accounting principles. The additional weighted
average per share information included in footnote E for the six
months ended June 30, 1996, is presented only for the purpose of
additional analysis and is not a required part of the basic
financial statements. This additional information is the
responsibility of the Company's management. Such information has
been subjected to the analytical procedures and inquiry applied in
the review of the basic financial statements and we are not aware
of any material modifications that should be made to such data.
We have previously audited, in accordance with generally accepted
auditing standards, the statement of assets and liabilities of PMD
Investment Company, including the statement of investments, as of
December 31, 1995 and the related statements of operations and
changes in net assets for the year then ended (not presented
herein) and the additional information included in footnote E for
each of the four years in the period ended December 31, 1995; and
in our report dated January 19, 1996, we expressed an unqualified
opinion on those financial statements and additional information.
In our opinion, the information set forth in the accompanying
statement of changes in net assets for the year ended December 31,
1995 and the per share data and ratios for each of the four years
in the period ended December 31, 1995 is fairly stated, in all
material respects, in relation to the financial statements from
which it has been derived.
DELOITTE & TOUCHE LLP
July 19, 1996
Omaha, Nebraska
<TABLE>
PMD INVESTMENT COMPANY
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1996
(Unaudited - See Independent Accountants' Review Report)
<CAPTION>
ASSETS:
<S>
Investment Securities, at approximate fair value, <C>
amortized cost of $14,349,099 (Note C) $14,480,284
Investment in Tax-Exempt Money-Market Fund 764,176
___________
Total Investments 15,244,460
___________
Interest Receivable 216,890
___________
Total Assets 15,461,350
LIABILITIES:
Accrued Expenses 20,759
__________
Net Assets (equivalent to $4.26 per share based on 3,620,739 shares
of common stock outstanding at June 30, 1996 (Note E) $15,440,591
===========
See notes to financial statements.
</TABLE>
<TABLE>
PMD INVESTMENT COMPANY
<CAPTION>
STATEMENT OF INVESTMENTS
JUNE 30, 1996
(Unaudited - See Independent Accountants' Review Report)
Approximate
Principal Amortized Fair
Amount Cost Value
<S> <C>
Abby National PLC Sub, 6.69%, due October 17, 2005 $ 550,000 $ 556,279 $ 529,375
Baltimore, Maryland, General Obligation Public Improvement,
9%, due October 15, 1996 500,000 501,891 507,750
Clark County, Washington Public Utilities District #1 Electric Revenue, 6.3%,
due January 1, 2004, callable January 1, 2001 250,000 248,963 265,275
Denver Met Major League Baseball Stadium District Colorado,
6.35%, due October 1, 2003 250,000 250,000 269,150
Douglas County, Nebraska SID #17 (Millard), 6.1%, due October 1, 2002 200,000 200,000 203,540
Federal Home Loan Mortgage Company, 7.0%, due June 1, 2024 2,167,052 2,176,341 2,086,438
Federal National Mortgage Association, 6.5%, due January 1, 2024 1,163,065 1,146,342 1,087,815
Federal National Mortgage Association, 7.8%, due March 29, 2005, callable
March 29, 2000 1,000,000 1,053,350 1,011,100
Florida State, General Services Revenues, 6%, due July 1, 2001 220,000 219,719 231,836
Grand Island, Nebraska Sanitary Sewer Revenue, 4.8%, due April 1, 2000 400,000 400,000 398,080
Hanover County, Virginia IDA Public Facilities Lease Revenue, 6.75%, due
July 15, 2007 150,000 150,000 161,070
Jefferson County, West Virginia Residential Mortgage Revenue, Refunding Series A,
7.75%, due January 1, 2012, callable January 1, 2001 75,000 75,463 78,818
Lincoln, Nebraska Hospital Revenue, 7%, due December 1, 1999, callable
December 1, 1998 180,000 180,000 194,688
Lincoln, Nebraska Water Revenue, 6.7%, due November 1, 2000 250,000 250,000 269,025
Milwaukee County, Wisconsin, Series A, 6.4%, due December 1, 2003 200,000 201,683 209,980
Nebraska Educational Facility Authority, Creighton University, 6.45%,
due September 1, 1996 250,000 250,000 251,225
Nebraska Educational Facility Authority, Creighton University, 6.65%,
due September 1, 1998 250,000 250,000 262,400
Nebraska Educational Facility Authority, Creighton University, 5.75%,
due June 1, 1997 125,000 125,000 127,225
Nebraska Higher Education Loan Program Multiple Mode-Student Loan Series C,
Adjustable rate, due December 1, 2015 600,000 600,000 600,000
Nebraska Investment Finance Authority, 6.9%, due March 15, 2000 320,000 320,000 331,936
Nebraska Investment Finance Authority, SFM Revenue, GNMA Mortgage
Backed Security Program, Series D, 6%, due September 15, 1997 220,000 220,000 223,322
Omaha, Nebraska, 6.8%, due December 1, 1999 365,000 365,434 392,228
Omaha, Nebraska, 4.15%, due October 15, 1998 485,000 486,473 484,855
Omaha Public Power District, Nebraska Electric Revenue, Series B, 5.9%,
due February 1, 2006 450,000 450,000 472,455
Omaha Public Power District, Nebraska Electric Revenue, Series A, 5%,
due February 1, 2001 500,000 510,065 504,800
Puerto Rico Public Buildings Authority, Guaranteed Public Education and
Health Facilities, 7.75%, due July 1, 2002, callable July 1, 1997 345,000 347,065 365,493
Richardson, Texas, 7%, due March 1, 2007 500,000 495,281 532,450
Sabine River Authority, Texas Water Supply Facility, Lake Fork Project, 6.5%,
due December 1, 2001 265,000 264,297 282,437
Travelers Group Inc., Serial Note, 9.5%, due March 1, 2002 50,000 56,901 55,595
Travelers Group Inc., Serial Note, 9.5%, due March 1, 2002 500,000 560,342 555,950
Tucson, Arizona, G.O., Ref. 5.8%, due July 1, 2005 250,000 249,202 260,400
University of Nebraska Facilities Corp., 7.2%, due July 1, 2004 250,000 250,000 274,100
Vermont State, Series B, 5.7%, due August 1, 2005 400,000 397,456 419,320
Washington State, Series A and AT-6, 5.8%, due February 1, 2003 250,000 246,991 260,875
Wisconsin Housing and Economic Development, Series 1, 7%, due October 1, 2003 295,000 294,561 319,278
___________ ___________ ___________
Totals $14,225,117 $14,349,099 $14,480,284
=========== =========== ===========
</TABLE>
<TABLE>
PMD INVESTMENT COMPANY
<CAPTION>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1996
(Unaudited - See Independent Accountants' Review Report)
<S> <C>
Interest Income from Investments $ 471,016
Expenses:
Investment advisory fee $ 20,327
Custodian fees 3,835
Professional fees 26,449
Shareholders' servicing costs 1,468
Directors' fees 7,500
Other 6,493
__________
Total Expenses 66,072
_________
Net Investment Income 404,944
Realized Gain from Security Transactions:
Proceeds from sales 2,202,951
Cost of securities sold 2,167,199
__________
Net Realized Gain 35,752
Unrealized Appreciation of Investments:
Beginning of period 606,539
End of period 131,185
__________
Change in Unrealized Appreciation (475,354)
__________
Net Realized Gain and Change In Unrealized Appreciation on Investments (439,602)
_________
Decrease in Net Assets Resulting From Operations $ (34,658)
=========
See notes to financial statements.
</TABLE>
<TABLE>
PMD INVESTMENT COMPANY
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1995 AND THE SIX
MONTHS ENDED JUNE 30, 1996
(Unaudited - See Independent Accountants' Review Report)
Accumulated
Undistrib- Realized Unrealized
Common Stock uted Net Gain (Loss) Appreciation
Shares $.50 Par Retained Investment on Sales of (Depreciation)
Value Earnings Income Securities of Investments Total
<S> <C>
Year Ended December 31, 1995:
Net investment income - $ - $ - $ 826,288 $ - $ - $ 826,288
Net realized gain from
securities transactions - - - - 195,196 - 195,196
Unrealized appreciation
of investments - - - - - 373,912 373,912
_________ __________ ___________ _________ _________ _________ ___________
Increase in net assets
from operations - - - 826,288 195,196 373,912 1,395,396
Dividends - $.228 per share - - - (873,849) - - (873,849)
Common stock redeemed
(Note B) (173,447) (86,724) (657,744) - - - (744,468)
_________ __________ ___________ _________ _________ _________ ___________
Total decrease in
net assets (173,447) (86,724) (657,744) (47,561) 195,196 373,912 (222,921)
Net assets on January 1,
1995 3,978,774 1,989,387 15,040,246 (96,857) (76,675) 232,626 17,088,727
_________ __________ ___________ _________ _________ _________ ___________
Net assets on December 31,
1995 3,805,327 $1,902,663 $14,382,502 $(144,418) $ 118,521 $ 606,538 $16,865,806
========= ========== =========== ========= ========= ========= ===========
Six months ended June 30,
1996 (unaudited):
Net investment income - $ - $ - $ 404,944 $ - $ - $ 404,944
Net realized gain from
securities transactions - - - - 35,752 - 35,752
Unrealized depreciation
of investments - - - - - (475,354) (475,354)
_________ __________ ___________ _________ _________ _________ ___________
Decrease in net assets
from operations - - - 404,944 35,752 (475,354) (34,658)
Dividends - $0.054 per
share - - - (196,605) - - (196,605)
Dividends - $0.051 per
share - - - (185,489) - - (185,489)
Common stock redeemed
(Note B) (184,588) (92,294) (725,431) - - - (817,725)
Capital gain distribution - - - - (190,738) - (190,738)
_________ __________ ___________ _________ _________ _________ ___________
Total increase
(decrease) in
net assets (184,588) (92,294) (725,431) 22,850 (154,986) (475,354) (1,425,215)
Net assets on January 1,
1996 3,805,327 1,902,663 14,382,502 (144,418) 118,521 606,538 16,865,806
_________ __________ ___________ _________ _________ _________ ___________
Net assets on June 30,
1996 3,620,739 $1,810,369 $13,657,071 $(121,568) $(36,465) $ 131,184 $15,440,599
========= ========== =========== ========= ======== ========= ===========
See notes to financial statements
</TABLE>
PMD INVESTMENT COMPANY
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 1996
(Unaudited - See Independent Accountants Review Report)
A. SIGNIFICANT ACCOUNTING POLICIES
Nature of Operations - PMD Investment Company (the Company) is
registered under the Investment Company Act of 1940, as amended,
as a closed-end diversified management investment company. The
following is a summary of significant accounting policies
followed by the Company in the preparation of its financial
statements.
Six-Month Financial Statements - The financial statements for
the six months ended June 30, 1996 reflect all adjustments
which, in the opinion of management, are necessary for a fair
statement of the results of operations for the six month period
presented.
Investment Securities - Investment securities are valued at fair
value as determined by the Company's investment adviser at the
statement of assets and liabilities date.
Securities Transactions - Securities transactions are recorded
on a trade date basis. Cost of securities sold is determined
using the identified cost method.
Interest Income - Interest income, adjusted for amortization of
premiums or accretion of discounts on investments in municipal
bonds and notes, is earned from settlement date and recorded on
the accrual basis.
Income Taxes - It is the Company's policy and plan to comply
with the requirements of the Internal Revenue Code applicable to
regulated investment companies and to distribute substantially
all of its income, including capital gains, to its shareholders.
No income tax provision has been made since substantially all
the income and capital gains are reported by the shareholders on
their own tax returns.
Management and Service Fees - The investment advisory fee, which
is payable monthly, is based on the value of net assets at each
month end at the annual rate of one-quarter of one percent.
Fees for the services of each of the three directors of the
Company are $5,000 annually with an additional $500 for each
board or committee meeting attended in excess of four meetings
each year. No additional compensation or benefits are paid to
officers of the Company.
Use of Estimates - In preparing the financial statements in
conformity with generally accepted accounting principles,
management is required to make estimates and assumptions that
affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could
differ from those estimates.
B. REDEMPTION OF SHARES
At June 30, 1996, the Company had authorized 20,000,000 shares
of $.50 par value common stock.
Shareholders may redeem shares of stock and receive the net
asset value per share on any December 31 or June 30 by tendering
the shares to be redeemed 90 days prior to the intended
redemption date.
C. CONTINGENT LIABILITIES
On January 15, 1981, the Company (formerly Pamida, Inc.) sold
substantially all of its assets which had been used in its
former operations as a discount store business. Although the
purchaser of the Company's operating assets assumed
substantially all of the Company's liabilities and obligations
as part of the purchase transaction, the Company remains
contingently liable for such liabilities and obligations,
including obligations under long-term real estate and equipment
leases, real estate mortgages, and pending claims and litigation
matters, until released by the obligees or until such
liabilities and obligations have been satisfied or discharged.
The total of such liabilities and obligations not released by
the obligees amounted to approximately $8,709,289 as of December
31, 1995, the most recent date for which such information is
available.
In connection with the asset sale transaction, the Company
agreed to deposit certain of its investment securities in an
escrow fund to provide additional collateral for the payment of
certain industrial development revenue (IDR) bonds which were
outstanding and assumed by the buyer. Among other provisions of
the escrow agreements, the value of securities deposited in
escrow is required to be at least 105% of the remaining
principal amount of IDR bonds outstanding. The IDR bonds
outstanding are payable serially through 1996. At December 31,
1995, this provision required securities with a total market
value of $42,000 to be deposited in the escrow fund.
<TABLE>
D. INVESTMENT TRANSACTIONS
The following summarizes the approximate value of securities
transactions for the periods indicated:
<CAPTION>
Six Months Ended Six Months Ended
June 30, 1996 June 30, 1995
Purchases Sales Purchases Sales
<S> <C>
Tax Exempt:
Municipal bonds and notes $1,110,810 $ 761,000 $ - $1,470,500
Taxable:
Corporate - 526,375 - -
Government agency - 915,575 - -
Other tax-exempt short-term investments 2,657,682 2,468,982 1,993,023 1,246,068
__________ __________ __________ __________
$3,768,492 $4,671,932 $1,993,023 $2,716,568
========== ========== ========== ==========
</TABLE>
<TABLE>
E. SUPPLEMENTAL WEIGHTED AVERAGE PER SHARE INFORMATION
<CAPTION>
Six Months
Ended
June 30, Years Ended December 31,
1996 1995 1994 1993 1992
(Unaudited)
<S> <C>
Weighted average shares outstanding (in thousands) 3,646 3,988 4,109 3,826 4,062
======= ====== ====== ====== ======
Income $ 0.129 $ 0.240 $ 0.255 $ 0.268 $ 0.295
Expenses (0.018) (0.024) (0.025) (0.024) (0.024)
_______ _______ _______ _______ _______
Net investment income 0.111 0.230 0.271 0.216 0.244
Distribution from net investment income (0.105) (0.228) (0.243) (0.251) (0.286)
Increase (decrease) in unrealized appreciation
of investments (0.130) 0.098 (0.244) 0.116 (0.019)
Net realized gain (loss) from securities transactions 0.010 0.051 - (0.002) (0.005)
Capital gain distribution (0.052) - - - -
_______ _______ _______ _______ _______
Increase (decrease) in net asset value using
average shares outstanding $(0.166) $ 0.137 $(0.257) $ 0.107 $(0.039)
======= ======= ======= ======= =======
Net asset value at beginning of period $ 4.431 $ 4.294 $ 4.551 $ 4.444 $ 4.483
======= ======= ======= ======= =======
Net asset value at end of period $ 4.265 $ 4.431 $ 4.294 $ 4.551 $ 4.444
======= ======= ======= ======= =======
Ratio of expenses to average net assets 0.4 %* 0.5 % 0.6 % 0.5 % 0.5 %
Ratio of net investment income to average net assets 2.6 %* 4.9 % 5.2 % 5.4 % 6.2 %
Portfolio turnover 4.9 %* 59.6 % 2.3 % 11.5 % 14.9 %
Number of shares outstanding at end of period (in thousands) 3,621 3,805 3,979 4,074 4,072
*Ratio has not been annualized.
</TABLE>