N-Q 1 a06-22453_5nq.htm QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS

 

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

811-2733

 

 

The Salomon Brothers Fund Inc

(Exact name of registrant as specified in charter)

 

125 Broad Street, New York, NY

 

10004

(Address of principal executive offices)

 

(Zip code)

 

Robert I. Frenkel, Esq.

Legg Mason & Co., LLC

300 First Stamford Place

Stamford, CT 06902

(Name and address of agent for service)

 

Registrant's telephone number, including area code:

1-800-725-6666

 

 

Date of fiscal year end:

December 31

 

 

 

 

Date of reporting period:

September 30, 2006

 

 




ITEM 1.                 SCHEDULE OF INVESTMENTS




The Salomon Brothers Fund Inc

FORM N-Q

September 30, 2006




The Salomon Brothers Fund Inc

Schedule of Investments (unaudited)

September 30, 2006

 

Shares

 

Security

 

Value

 

COMMON STOCKS — 99.1%

 

 

 

CONSUMER DISCRETIONARY — 12.4%

 

 

 

Hotels, Restaurants & Leisure — 3.0%

 

 

 

517,230

 

 

McDonald’s Corp.

 

$

20,234,037

 

172,300

 

 

Station Casinos Inc.

 

9,964,109

 

 

 

Total Hotels, Restaurants & Leisure

 

30,198,146

 

 

 

 

 

 

 

Household Durables — 2.9%

 

 

 

127,200

 

 

Fortune Brands Inc.

 

9,553,992

 

705,800

 

 

Toll Brothers Inc. *

 

19,818,864

 

 

 

Total Household Durables

 

29,372,856

 

 

 

 

 

 

 

Media — 4.0%

 

 

 

 

 

304,630

 

 

EchoStar Communications Corp., Class A Shares *

 

9,973,586

 

797,870

 

 

News Corp., Class B Shares

 

16,468,037

 

722,160

 

 

Time Warner Inc.

 

13,164,977

 

 

 

Total Media

 

39,606,600

 

 

 

 

 

 

 

Specialty Retail — 2.5%

 

 

 

 

 

343,800

 

 

Best Buy Co. Inc.

 

18,413,928

 

284,330

 

 

Staples Inc.

 

6,917,749

 

 

 

Total Specialty Retail

 

25,331,677

 

 

 

TOTAL CONSUMER DISCRETIONARY

 

124,509,279

 

 

 

 

 

 

 

CONSUMER STAPLES — 10.7%

 

 

 

Beverages — 2.1%

 

 

 

 

 

327,830

 

 

PepsiCo Inc.

 

21,394,186

 

 

 

 

 

 

 

Food & Staples Retailing — 2.7%

 

 

 

546,030

 

 

Wal-Mart Stores Inc.

 

26,930,200

 

 

 

 

 

 

 

Food Products — 2.6%

 

 

 

 

 

280,630

 

 

Kellogg Co.

 

13,896,797

 

312,270

 

 

McCormick & Co. Inc., Non Voting Shares

 

11,860,015

 

 

 

Total Food Products

 

25,756,812

 

 

 

 

 

 

 

Household Products — 1.5%

 

 

 

253,530

 

 

Procter & Gamble Co.

 

15,713,789

 

 

 

 

 

 

 

Tobacco — 1.8%

 

 

 

 

 

233,250

 

 

Altria Group Inc.

 

17,855,287

 

 

 

TOTAL CONSUMER STAPLES

 

107,650,274

 

 

 

 

 

 

 

ENERGY — 7.7%

 

 

 

 

 

Energy Equipment & Services — 1.0%

 

 

 

223,280

 

 

ENSCO International Inc.

 

9,786,362

 

 

 

 

 

 

 

Oil, Gas & Consumable Fuels — 6.7%

 

 

 

150,862

 

 

ConocoPhillips

 

8,980,815

 

401,030

 

 

Exxon Mobil Corp.

 

26,909,113

 

400

 

 

Gas Properties (100% owned) (a)(b)

 

980,452

 

117,660

 

 

Suncor Energy Inc.

 

8,477,403

 

333,480

 

 

Total SA, ADR

 

21,989,671

 

 

 

Total Oil, Gas & Consumable Fuels

 

67,337,454

 

 

 

TOTAL ENERGY

 

77,123,816

 

 

 

 

 

 

 

FINANCIALS — 22.9%

 

 

 

 

 

Capital Markets — 4.0%

 

 

 

 

 

121,960

 

 

Goldman Sachs Group Inc.

 

20,631,973

 

246,020

 

 

Merrill Lynch & Co. Inc.

 

19,243,685

 

 

 

Total Capital Markets

 

39,875,658

 

 

 

 

 

 

 

Commercial Banks — 2.7%

 

 

 

750,560

 

 

Wells Fargo & Co.

 

27,155,261

 

 

See Notes to Schedule of Investments.

1




The Salomon Brothers Fund Inc

Schedule of Investments (unaudited) (continued)

September 30, 2006

 

Shares

 

Security

 

Value

 

FINANCIALS — 22.9% (continued)

 

 

 

Consumer Finance — 3.3%

 

 

 

308,070

 

 

American Express Co.

 

$

17,276,566

 

200,870

 

 

Capital One Financial Corp.

 

15,800,434

 

 

 

Total Consumer Finance

 

33,077,000

 

 

 

 

 

 

 

Diversified Financial Services — 4.6%

 

 

 

407,774

 

 

Bank of America Corp.

 

21,844,453

 

525,690

 

 

JPMorgan Chase & Co.

 

24,686,402

 

 

 

Total Diversified Financial Services

 

46,530,855

 

 

 

 

 

 

 

Insurance — 3.6%

 

 

 

 

 

267,580

 

 

AFLAC Inc.

 

12,244,461

 

112

 

 

Berkshire Hathaway Inc., Class A Shares *

 

10,729,600

 

255,200

 

 

Chubb Corp.

 

13,260,192

 

 

 

 

Total Insurance

 

36,234,253

 

 

 

 

 

 

 

Thrifts & Mortgage Finance — 4.7%

 

 

 

321,000

 

 

Freddie Mac

 

21,291,930

 

215,400

 

 

Golden West Financial Corp.

 

16,639,650

 

716,500

 

 

Hudson City Bancorp Inc.

 

9,493,625

 

 

 

 

Total Thrifts & Mortgage Finance

 

47,425,205

 

 

 

TOTAL FINANCIALS

 

230,298,232

 

 

 

 

 

 

 

HEALTH CARE — 9.8%

 

 

 

Biotechnology — 2.0%

 

 

 

 

 

276,636

 

 

Amgen Inc. *

 

19,787,773

 

 

 

 

 

 

 

Health Care Providers & Services — 2.0%

 

 

 

185,505

 

 

Coventry Health Care Inc. *

 

9,557,217

 

225,530

 

 

UnitedHealth Group Inc.

 

11,096,076

 

 

 

Total Health Care Providers & Services

 

20,653,293

 

 

 

 

 

 

 

Pharmaceuticals — 5.8%

 

 

 

366,730

 

 

Sanofi-Aventis, ADR

 

16,308,483

 

556,100

 

 

Schering-Plough Corp.

 

12,284,249

 

473,540

 

 

Teva Pharmaceutical Industries Ltd., ADR

 

16,142,979

 

265,800

 

 

Wyeth

 

13,513,272

 

 

 

Total Pharmaceuticals

 

58,248,983

 

 

 

TOTAL HEALTH CARE

 

98,690,049

 

 

 

 

 

 

 

INDUSTRIALS — 11.1%

 

 

 

Aerospace & Defense — 3.2%

 

 

 

159,711

 

 

Boeing Co.

 

12,593,212

 

280,400

 

 

Honeywell International Inc.

 

11,468,360

 

437,800

 

 

Orbital Sciences Corp. *

 

8,217,506

 

 

 

Total Aerospace & Defense

 

32,279,078

 

 

 

 

 

 

 

Building Products — 2.0%

 

 

 

730,100

 

 

Masco Corp.

 

20,019,342

 

 

 

 

 

 

 

Industrial Conglomerates — 4.7%

 

 

 

1,075,730

 

 

General Electric Co.

 

37,973,269

 

107,860

 

 

Textron Inc.

 

9,437,750

 

 

 

Total Industrial Conglomerates

 

47,411,019

 

 

 

 

 

 

 

Machinery — 1.2%

 

 

 

 

 

152,700

 

 

Parker Hannifin Corp.

 

11,869,371

 

 

 

TOTAL INDUSTRIALS

 

111,578,810

 

 

 

 

 

 

 

INFORMATION TECHNOLOGY — 15.5%

 

 

 

Communications Equipment — 5.9%

 

 

 

912,400

 

 

Cisco Systems Inc. *

 

20,985,200

 

397,000

 

 

Motorola Inc.

 

9,925,000

 

 

See Notes to Schedule of Investments.

2




The Salomon Brothers Fund Inc

Schedule of Investments (unaudited) (continued)

September 30, 2006

 

Shares

 

Security

 

Value

 

Communications Equipment — 5.9% (continued)

 

 

 

790,500

 

 

QUALCOMM Inc.

 

$

28,734,675

 

 

 

Total Communications Equipment

 

59,644,875

 

 

 

 

 

 

 

Electronic Equipment & Instruments — 1.0%

 

 

 

496,470

 

 

Dolby Laboratories Inc., Class A Shares *

 

9,854,930

 

 

 

 

 

 

 

IT Services — 1.0%

 

 

 

 

 

262,330

 

 

Paychex Inc.

 

9,666,861

 

 

 

 

 

 

 

Semiconductors & Semiconductor Equipment — 1.9%

 

 

 

491,230

 

 

ASML Holding NV, NY Registered Shares *

 

11,435,834

 

233,500

 

 

Texas Instruments Inc.

 

7,763,875

 

 

 

Total Semiconductors & Semiconductor Equipment

 

19,199,709

 

 

 

 

 

 

 

Software — 5.7%

 

 

 

 

 

290,200

 

 

Adobe Systems Inc. *

 

10,867,990

 

193,900

 

 

Electronic Arts Inc. *

 

10,796,352

 

1,286,940

 

 

Microsoft Corp.

 

35,172,070

 

 

 

Total Software

 

56,836,412

 

 

 

TOTAL INFORMATION TECHNOLOGY

 

155,202,787

 

 

 

 

 

 

 

MATERIALS — 5.8%

 

 

 

 

 

Chemicals — 2.5%

 

 

 

 

 

347,030

 

 

E.I. du Pont de Nemours & Co.

 

14,866,765

 

233,830

 

 

Ecolab Inc.

 

10,012,601

 

 

 

Total Chemicals

 

24,879,366

 

 

 

 

 

 

 

Metals & Mining — 3.3%

 

 

 

1,078,768

 

 

Barrick Gold Corp.

 

33,139,753

 

 

 

TOTAL MATERIALS

 

58,019,119

 

 

 

 

 

 

 

TELECOMMUNICATION SERVICES — 0.8%

 

 

 

Wireless Telecommunication Services — 0.8%

 

 

 

147,940

 

 

ALLTEL Corp.

 

8,210,670

 

 

 

 

 

 

 

UTILITIES — 2.4%

 

 

 

 

 

Multi-Utilities — 2.4%

 

 

 

 

 

479,530

 

 

Sempra Energy

 

24,096,383

 

 

 

TOTAL INVESTMENTS BEFORE SHORT-TERM INVESTMENT
(Cost — $762,610,616)

 

995,379,419

 

 

Face
Amount

 

 

 

 

 

SHORT-TERM INVESTMENT — 1.1%

 

 

 

Repurchase Agreement — 1.1%

 

 

 

$           11,115,000

 

 

Interest in $414,241,000 joint tri-party repurchase agreement dated 9/29/06 with Banc of America Securities LLC, 5.300% due 10/2/06; Proceeds at maturity - $11,119,909; (Fully collateralized by various U.S. Government Agency Obligations, 0.000% to 5.600% due 2/28/07 to 9/26/13; Market value - $11,337,311)
(Cost — $11,115,000)

 

11,115,000

 

 

 

TOTAL INVESTMENTS — 100.2% (Cost — $773,725,616#)

 

1,006,494,419

 

 

 

Liabilities in Excess of Other Assets — (0.2)%

 

(2,461,918

)

 

 

TOTAL NET ASSETS — 100.0%

 

$

1,004,032,501

 

 


*

Non-income producing security.

(a)

Security is valued in good faith at fair value by or under the direction of the Board of Directors (See Note 1).

(b)

Illiquid security.

#

Aggregate cost for federal income tax purposes is substantially the same.

 

 

 

Abbreviation used in this schedule:

 

See Notes to Schedule of Investments.

3




The Salomon Brothers Fund Inc

Schedule of Investments (unaudited) (continued)

 

September 30, 2006

 

ADR - American Depositary Receipt

 

See Notes to Schedule of Investments.

4




Notes to Schedule of Investments (unaudited)

1. Organization and Significant Accounting Policies

The Salomon Brothers Fund Inc (the “Fund”) is registered as a diversified, open-end management investment company under the Investment Company Act of 1940, as amended, (the “1940 Act”). Prior to the close of the June 30, 2006 markets, the Fund was registered as a closed-end management investment company under the 1940 Act.

The following are significant accounting policies consistently followed by the Fund and are in conformity with U.S. generally accepted accounting principles (“GAAP”).  

(a) Investment Valuation.  Equity securities for which market quotations are available are valued at the last sale price or official closing price on the primary market or exchange on which they trade.  Debt securities are valued at the mean between the bid and asked prices provided by an independent pricing service that are based on transactions in debt obligations, quotations from bond dealers, market transactions in comparable securities and various other relationships between securities. When prices are not readily available, or are determined not to reflect fair value, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally traded, but before the Fund calculates its net asset value, the Fund may value these investments at fair value as determined in accordance with the procedures approved by the Fund’s Board of Directors. Short-term obligations with maturities of 60 days or less are valued at amortized cost, which approximates market value.

(b) Repurchase Agreements.  When entering into repurchase agreements, it is the Fund’s policy that its custodian or a third party custodian take possession of the underlying collateral securities, the market value of which at least equals the principal amount of the repurchase transaction, including accrued interest. To the extent that any repurchase transaction exceeds one business day, the value of the collateral is marked-to-market to ensure the adequacy of the collateral. If the seller defaults, and the market value of the collateral declines or if bankruptcy proceedings are commenced with respect to the seller of the security, realization of the collateral by the Fund may be delayed or limited.

(c) Security Transactions.  Security transactions are accounted for on a trade date basis.

2.  Investments

At September 30, 2006, the aggregate gross unrealized appreciation and depreciation of investments for federal income tax purposes were substantially as follows:

Gross unrealized appreciation

 

$

244,270,904

 

Gross unrealized depreciation

 

(11,502,101

)

Net unrealized appreciation

 

$

232,768,803

 

 




ITEM 2.                  CONTROLS AND PROCEDURES.

(a)           The registrant’s principal executive officer and principal financial officer have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a- 3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective as of a date within 90 days of the filing date of this report that includes the disclosure required by this paragraph, based on their evaluation of the disclosure controls and procedures required by Rule 30a-3(b) under the 1940 Act and 15d-15(b) under the Securities Exchange Act of 1934

(b)           There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the registrant’s last fiscal quarter that have materially affected, or are likely to materially affect the registrant’s internal control over financial reporting.

ITEM 3.                  EXHIBITS.

Certifications pursuant to Rule 30a-2(a) under the Investment Company Act of 1940, as amended, are attached hereto.




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.

The Salomon Brothers Fund Inc

By

/s/ R. Jay Gerken

 

R. Jay Gerken

Chief Executive Officer

 

Date: November 28, 2006

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By

/s/ R. Jay Gerken

 

R. Jay Gerken

Chief Executive Officer

 

Date: November 28, 2006

 

 

By

/s/ Frances M. Guggino

 

Frances M. Guggino

Chief Financial Officer

 

Date: November 28, 2006