N-Q 1 d18046.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-Q QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT INVESTMENT COMPANY Investment Company Act File Number 811-03931 Clipper Fund, Inc. (Exact name of registrant as specified in charter) 9601 Wilshire Boulevard, Suite 800 Beverly Hills, California 90210 (Address of principal executive offices) (Zip code) James H. Gipson 9601 Wilshire Boulevard, Suite 800 Beverly Hills, California 90210 (Name and address of agent for service) Registrant's telephone number, including area code: 800-776-5033 Date of fiscal year end: December 31, 2005 Date of reporting period: September 30, 2005 Item 1. Schedule of Investments Clipper Fund, Inc. Quarterly Portfolio Holdings September 30, 2005 (Unaudited) COMMON STOCKS
Market Value % Shares Note 3 Note 1 ------------- -------------- ------ Consumer Discretionary Media 5,361,700 Time Warner Inc. .................... $ 97,100,387 1.6% 7,850,400 Interpublic Group of Companies, Inc.* 91,378,656 1.4% -------------- ----- Total Consumer Discretionary ............ 188,479,043 3.0% -------------- ----- Consumer Staples Beverages 2,885,200 The Coca-Cola Company ............... 124,611,788 2.0% -------------- ----- Food Products 3,836,700 Kraft Foods Inc. .................... 117,364,653 1.9% -------------- ----- Food & Staples Retailing 5,801,100 Wal-Mart Stores Inc ................. 254,204,202 4.1% 5,495,800 The Kroger Co.* ..................... 113,158,522 1.8% 2,500,900 Safeway Inc. ........................ 64,023,040 1.1% -------------- ----- 431,385,764 7.0% -------------- ----- Tobacco 3,767,400 Altria Group Inc. ................... 277,695,054 4.5% -------------- ----- Total Consumer Staples .................. 951,057,259 15.4% -------------- ----- Energy Oil, Gas & Consumable Fuels 16,273,800 El Paso Corporation ................. 226,205,820 3.7% -------------- ----- Total Energy ............................ 226,205,820 3.7% -------------- ----- Financials Capital Markets 2,238,600 Merrill Lynch & Co., Inc. ........... 137,338,110 2.2% -------------- ----- Consumer Finance 6,862,200 American Express Company ............ 394,164,768 6.4% -------------- ----- Thrifts & Mortgage Finance 8,863,400 Freddie Mac ......................... 500,427,564 8.1% 3,507,400 Fannie Mae .......................... 157,201,668 2.5% -------------- ----- 657,629,232 10.6% -------------- -----
Market Value % Shares Note 3 Note 1 ------------- -------------- ------ Insurance 13,395,100 Marsh & McLennan Companies Inc. ........ $ 407,077,089 6.6% 2,384,960 Old Republic International Corporation .......................... 63,606,883 1.0% -------------- ----- 470,683,972 7.6% -------------- ----- Total Financials ........................... 1,659,816,082 26.8% -------------- ----- Health Care Health Care Providers & Services 14,584,500 Tenet Healthcare Corporation* .......... 163,783,935 2.6% 2,011,600 HCA Inc ................................ 96,395,872 1.6% -------------- ----- 260,179,807 4.2% -------------- ----- Pharmaceuticals 12,911,300 Pfizer Inc. ............................ 322,395,161 5.2% 2,691,800 Wyeth .................................. 124,549,586 2.0% 1,250,500 Johnson & Johnson ...................... 79,131,640 1.3% -------------- ----- 526,076,387 8.5% -------------- ----- Total Health Care .......................... 786,256,194 12.7% -------------- ----- Industrials Commercial Services & Supplies 1,756,700 Pitney Bowes Inc. ...................... 73,324,658 1.2% Industrial Conglomerates 7,728,400 Tyco International Ltd. ................ 215,235,940 3.5% -------------- ----- Total Industrials .......................... 288,560,598 4.7% -------------- ----- Information Technology IT Services 13,637,300 Electronic Data Systems ................ 306,021,012 4.9% -------------- ----- Total Information Technology ............... 306,021,012 4.9% -------------- ----- TOTAL COMMON STOCK (Cost $3,854,613,161, Note 2) ............ 4,406,396,008 71.2% -------------- -----
SHORT TERM INVESTMENTS
Market Value % Par Value Note 3 Note 1 ------------- -------------- ------ US Treasury Bill $ 856,235,000 (0.00%, 11/25/05) ........................... $ 852,088,254 13.8% US Treasury Bill $ 233,745,000 (0.00%, 01/26/06) ........................... 231,087,086 3.7% US Treasury Bill $ 229,130,000 (0.00%, 02/16/06) ........................... 225,964,340 3.7% US Treasury Bill $ 187,404,000 (0.00%, 10/20/05) ........................... 187,136,387 3.0% State Street Bank & Trust Company Repurchase Agreements $ 77,085,000 Repurchase Agreement, dated 09/30/05 at 3.10% to be repurchased at $77,104,914 on 10/03/05 collateralized by $77,600,000 FHLB 4.125% due 04/18/08 with a value of $78,627,424, Note 4 ..................................... 77,085,000 1.2% -------------- ------ TOTAL SHORT TERM INVESTMENTS (Cost $1,573,398,768, Note 2) .............. 1,573,361,067 25.4% -------------- ------ Total Investment Portfolio (Cost $5,428,011,929, Note 2) ... 5,979,757,075 96.6% Cash and Receivables less Liabilities ...................... 208,971,210 3.4% -------------- ------ TOTAL NET ASSETS ........................................... $6,188,728,285 100.0% ============== ======
----------------- Notes to Portfolio Investments: 1. All percentages are based on the total net assets of the Fund as of September 30, 2005. 2. Aggregate unrealized appreciation and depreciation, based on cost for federal income tax purposes, are $849,915,738 and $298,164,554 respectively, resulting in a net unrealized appreciation of $551,748,183. 3. Security valuation - Investments in securities traded on a national securities exchange are valued at the last sale price on such exchange on the business day as of which such value is being determined. Securities traded in the over-the-counter market and listed securities for which no sale was reported on that date are valued at the last reported bid price. If no bid price is quoted on such day, then the security is valued by such method as the Board of Directors of the Fund shall determine in good faith to reflect its fair value. Discounts and premiums are accreted and amortized over the life of the respective securities. Short term investments are stated at amortized cost, which approximates current market value. Securities for which market quotations are not readily available are valued at fair value as determined in good faith based upon guidelines established by the Board of Directors. 4. Repurchase agreements - In connection with transactions in repurchase agreements, it is the Fund's policy that its custodian take possession of the underlying collateral securities, and to have legally segregated in the Federal Reserve Book Entry System or to have segregated within the custodian's vault, all securities held as collateral for repurchase agreements. The market value of the underlying securities is required to be at least 102% of the resale price at the time of purchase. If the seller of the agreement defaults and the value of the collateral declines, or if the seller enters an insolvency proceeding, realization of the value of the collateral by the Fund may be delayed or limited. FHLB = Federal Home Loan Bank. * non-income producing security Item 2: Controls and Procedures (a) The principal executive and principal financial officers of Clipper Fund, Inc. (the "Fund") have evaluated the effectiveness of the Fund's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) as of a date within 90 days of the filing date of this report, based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the Act and Rule 13a-15(b) or 15d-15(b) under the Exchange Act of 1934, and concluded that such controls and procedures are effective. (b) There have been no changes in the Fund's internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the Fund's last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Fund's internal control over financial reporting. Item 3: Exhibits Attached as Exhibit 3 are the certifications of the principal executive and principal financial officers of the Fund required by Rule 30a-2(a) of the Investment Company Act of 1940. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (Registrant) CLIPPER FUND, INC. By (Signature and Title)* /s/ James H. Gipson James H. Gipson, President Date November 28, 2005 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By (Signature and Title)* /s/ James H. Gipson James H. Gipson, President Date November 28, 2005 By (Signature and Title)* /s/ Michael Kromm Michael Kromm, Secretary & Treasurer Date November 28, 2005