-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PctqZFyEUUa3BNhAQ5ZuK1n8rrNhBHqrahVyIAEtlH3WpHq65qRNt+vQQViaO83u kXPHCXDa7MX/Jjad2eV9nA== 0000950131-99-003411.txt : 19990624 0000950131-99-003411.hdr.sgml : 19990624 ACCESSION NUMBER: 0000950131-99-003411 CONFORMED SUBMISSION TYPE: N-30B-2 PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990525 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BAKER FENTRESS & CO CENTRAL INDEX KEY: 0000009235 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 360767350 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30B-2 SEC ACT: SEC FILE NUMBER: 811-02144 FILM NUMBER: 99633986 BUSINESS ADDRESS: STREET 1: 200 W. MADISON ST. STREET 2: SUITE 3510 CITY: CHICAGO STATE: IL ZIP: 60606 BUSINESS PHONE: 3122369190 FORMER COMPANY: FORMER CONFORMED NAME: BAKER FENTRESS & CO ET AL DATE OF NAME CHANGE: 19940714 N-30B-2 1 QUARTERLY REPORT DATED 03/30/1999 Corporate Data Transfer and Dividend Disbursing Agent ChaseMellon Shareholder Services Overpeck Center 85 Challenger Road Richfield Park, New Jersey 07660 Custodian UMB Bank, N.A. Legal Counsel Bell, Boyd & Lloyd Address of Company 200 West Madison Street Suite 3510 Chicago, Illinois 60606 312-236-9190 or 800-BKF-1891 Web Site www.bakerfentress.com Baker, Fentress & Company Report to Shareholders INVESTING WITH A LONG-TERM PERSPECTIVE FIRST QUARTER MARCH 31, 1999 The Company's Report to Shareholders is printed on recycled paper. We encourage recycling and use of recycled products. To Our Shareholders The strength of the U.S. stock market's continued advance remained extremely narrow through the first quarter of 1999. BKF's net asset value total return over this period was up 2.9%, while our market value total return was down 1.6%. Comparable market returns were: S&P 500 Index 5.0% Russell 1000 Value Index 1.9% Large Cap Value Mutual Funds (1) 1.0% (1) Source: This is the mean total return for 529 mutual funds categorized as large cap value funds by Morningstar, Inc. The market value total return for the first quarter was negatively impacted by a widening of our discount from 22.5% to 24.9% during the 1st quarter. The recent market advance has been dominated by large cap growth, technology, and Internet stocks at the expense of more modestly valued sectors. The Baker Fentress public portfolio remains focused on a large cap value style. This approach may not keep pace during certain steep market advances, but we believe our strategy should result in solid risk-adjusted total returns over an entire market cycle. We believe that our performance should be measured in terms of total return, instead of per share price appreciation. This is illustrated by the following chart. It compares the BKF total return based on net asset value, including reinvested dividends, to simple per share price appreciation over the three years ended March 31, 1999. The total return over this three-year period was 33.2%, compared to a decline of 18.6% if you only factor in price appreciation. BKF TOTAL RETURN VS. PRICE APPRECIATION THREE YEARS ENDED MARCH 31, 1999 [CHART] Baker, Fentress & Company Shareholder value with and without dividends reinvested 3/31/96-3/31/99
Date Price appreciation Total return 3/31/96 4/30/96 4.05% 4.05% 5/31/96 5.41% 6.47% 6/30/96 3.38% 4.42% 7/31/96 -3.38% -2.40% 8/31/96 -0.68% 0.33% 9/30/96 3.38% 4.42% 10/31/96 0.68% 1.69% 11/30/96 -6.76% 6.88% 12/31/96 -8.78% 4.55% 1/31/97 -4.05% 9.98% 2/28/97 -4.05% 9.98% 3/31/97 -3.38% 10.75% 4/30/97 -2.70% 11.52% 5/31/97 0.00% 15.83% 6/30/97 6.78% 23.86% 7/31/97 12.16% 29.92% 8/31/97 7.43% 24.44% 9/30/97 12.84% 30.70% 10/31/97 8.45% 25.62% 11/30/97 -2.36% 29.53% 12/31/97 -1.35% 30.87% 1/31/98 -1.35% 30.87% 2/28/98 4.39% 38.49% 3/31/98 1.35% 48.67% 4/30/98 0.00% 46.69% 5/31/98 0.68% 47.68% 6/30/98 -1.01% 45.20% 7/31/98 -0.68% 45.70% 8/31/98 -10.47% 31.32% 9/30/98 -11.82% 29.34% 10/31/98 -7.49% 35.78% 11/30/98 -13.85% 40.91% 12/31/98 -17.29% 35.38% 1/31/99 -18.55% 36.49% 2/28/99 -18.58% 33.17% 3/31/99 -18.58% 33.17%
NEW BAKER FENTRESS WEB SITE At the beginning of April, we introduced a new web site. You can locate it on the Internet at www.bakerfentress.com. The site contains: . Daily net asset value information . Market value total return over the last 12 months . Summary financial information . Descriptions of our major holdings . Recent shareholder reports . How to request additional information from the Company or ask us questions via e-mail We welcome you to our new home on the Internet and are interested in your feedback. Baker, Fentress & Company 1st Quarter Report 1999 1 To Our Shareholders (continued) REVISED DISTRIBUTION SCHEDULE Beginning this year, we plan to make four distributions per year, compared to two, as has been our practice in recent years. We believe shareholders will appreciate a more frequent payment cycle. Our first ordinary income dividend of $0.30 per share is payable June 15, 1999 to shareholders of record on May 14. We plan to make a capital gain distribution in August, followed by the second income dividend in November and a second capital gain distribution in December. Next year we plan to make payments in March, June, October and December. LEVCO Total assets under Levco's management as of March 31, 1999 were $8.5 billion compared to $8.3 billion at the end of 1998. Unaudited total revenues for the three months ended March 31, 1999 were $11.6 million compared to $10.7 million for the first quarter of 1998. Early in April, Jessica Bibliowicz announced her resignation from Levco and from the board of directors of the Company. During her time at Levco, the firm developed and expanded its retail marketing, institutional marketing, and client servicing areas and also increased the depth of its investment management team. We believe that the infrastructure of the firm is solid and extend our best wishes to Jessica in her new endeavors. CONSOLIDATED-TOMOKA Consolidated-Tomoka Land Co. (AMEX symbol: CTO) completed the sale of its citrus business, Lake Placid Groves, on April 7, 1999. The sale for $30.9 million generated a capital gain of approximately $8.0 million and cash flow of $22.0 million after income taxes. The cash proceeds from the sale have been invested in short-term investments. The eventual use of these funds is still under consideration by CTO's Board of Directors. Now that this sale is complete, CTO will be able to concentrate its efforts on the development of its land holdings in the Daytona Beach area. PORTFOLIO SECTOR WEIGHTINGS THREE YEARS ENDED MARCH 31,1999 [Chart Appears Here] NEW TRANSFER AGENT Beginning in May, ChaseMellon Shareholder Services will become our transfer agent. We hope this change will result in improved shareholder service. You will be receiving some information within the next couple of weeks concerning new contact information. 2 Baker, Fentress & Company 1st Quarter Report 1999 QUARTERLY PORTFOLIO INFORMATION Beginning with this quarterly report, we will include expanded portfolio information we hope you will find useful. It appears immediately following this letter. ANNUAL SHAREHOLDERS' MEETING We held our annual meeting in Chicago on April 22, 1999 to re-elect five directors and ratify the appointment of Ernst & Young LLP as our auditors for 1999. The results of this meeting can be found on page 8 of this report. James P. Gorter Chairman of the Board John A. Levin President and CEO INDUSTRY SECTOR WEIGHTINGS--PUBLIC PORTFOLIO
AS OF MARCH 31, 1999 Percent of NAV* -------- Basic Materials......... 3.2% Capital Goods........... 12.8 Communication Services.. 4.6 Consumer Cyclical....... 9.0 Consumer Staples........ 14.2 Energy.................. 5.6 Financials.............. 15.9 Health Care............. 3.0 Technology.............. 14.8 Utilities............... 9.2 Cash Equivalents........ 7.7 -------- Total................... 100.0% ========
*Public Portfolio only PUBLIC PORTFOLIO STATISTICS
AS OF MARCH 31, 1999 Weighted Average - ---------------- P/E Ratio--Last 4 quarters............... 22.6x Earnings Growth Rate--Last 5 years...... 13.0% Price to Book Ratio..................... 2.7x Market Cap.............................. 36.0 billion
TOP TEN HOLDINGS - TOTAL PORTFOLIO AS OF MARCH 31, 1999 Our top ten holdings as a percent of net assets at March 31, 1999 were: 1. Levin Management (with its subsidiaries, including Levco) Investment advisor.................... 14.7% 2. Consolidated-Tomoka, Florida real estate............... 8.8 3. Citadel Communications, Radio broadcasting............. 7.8 4. Tribune, Publishing and broadcasting................... 3.3 5. MediaOne Group, Communication services................. 2.9 6. Texas Instruments, Electronic components and semiconductors..................................... 2.3 7. XL Capital, Insurance.................................. 2.0 8. Hewlett-Packard, Computer technology................... 1.8 9. KeySpan Energy, Electric and gas utility............... 1.8 10. Potomac Electric Power, Electric and gas utility....... 1.8 ----- Total............................................... 47.2% =====
Baker, Fentress & Company 1st Quarter Report 1999 3 Statement of Investments
March 31, 1999 - Unaudited Shares Value ------- ----------- INVESTMENTS IN UNAFFILIATED ISSUERS -- 61.08% Common Stock -- 54.99% Basic Materials -- 2.09% E.I. du Pont de Nemours and Company........... 65,000 $ 3,774,095 Getchell Gold Corporation (b)................. 26,900 704,457 Monsanto Company.............................. 244,300 11,222,653 Minerals Technologies Inc..................... 14,700 705,600 ----------- 16,406,805 ----------- Capital Goods -- 6.95% The Boeing Company............................ 96,436 3,278,824 Cable Design Technologies Corporation (b)..... 95,940 1,055,340 Cordant Technologies Inc...................... 17,100 680,802 Crown Cork & Seal Company, Inc................ 19,800 565,547 General Electric Company...................... 80,000 8,850,000 Lockheed Martin Corporation................... 120,600 4,552,650 Owens-Illinois, Inc. (b)...................... 309,800 7,745,000 Raychem Corporation........................... 23,300 525,718 Sundstrand Corporation........................ 191,595 13,315,852 Tenneco Inc................................... 166,600 4,654,471 United Technologies Corporation............... 67,800 9,182,696 ----------- 54,406,900 ----------- Communication Services -- 2.62% Bell Atlantic Corporation..................... 222,000 11,474,736 BellSouth Corporation......................... 143,700 5,757,053 Loral Space & Communications Ltd. (b)......... 225,775 3,259,739 ----------- 20,491,528 ----------- Consumer Cyclical -- 5.84% Beazer Homes USA, Inc. (b).................... 33,000 693,000 The Black & Decker Corporation................ 184,200 10,211,680 TRW Inc....................................... 190,670 8,675,485 Tribune Company............................... 400,100 26,181,743 ----------- 45,761,908 ----------- Consumer Staples -- 7.68% Chancellor Media Corporation (b).............. 202,100 9,523,962 Cumulus Media Inc., Class A (b)............... 70,000 822,500 The Walt Disney Company....................... 128,900 4,012,012 Fox Entertainment Group, Inc. (b)............. 87,800 2,381,575 Interstate Bakeries Corporation............... 31,900 687,860 Loews Cineplex Entertainment Corporation (b).. 75,000 745,350 MediaOne Group, Inc. (b)...................... 353,000 22,393,437 Nabisco Holdings Corp......................... 199,920 8,309,275 Pepsico, Inc.................................. 35,100 1,375,499 Ralston Purina Company........................ 370,500 9,887,904 ----------- 60,139,374 -----------
See accompanying Notes to Statement of Investments 4 Baker, Fentress & Company 1st Quarter Report 1999 Statement of Investments
March 31, 1999 - Unaudited Shares Value -------- ----------- INVESTMENTS IN UNAFFILIATED ISSUERS (Continued) Energy -- 3.60% Conoco Inc. (b) .......................................... 200,200 $ 4,917,513 Schlumberger N.V. ........................................ 38,700 2,329,276 Sempra Energy ............................................ 551,343 10,579,169 Unocal Corporation ....................................... 280,000 10,325,000 ----------- 28,150,958 ----------- Financials -- 10.40% Ace Ltd. ................................................. 216,800 6,761,558 Aetna Life Insurance and Annuity Company ................. 68,600 5,693,800 BankAmerica Corporation .................................. 60,987 4,307,207 The Bank of New York Company, Inc. ....................... 268,600 9,652,947 W.R. Berkley Corporation ................................. 65,500 1,604,750 Crescent Real Estate Equities Company .................... 35,000 752,500 CRIIMI MAE Inc. .......................................... 278,700 749,146 Fairfax Financial Holdings Ltd. (Stock Purchase Rights) .. 78,000 19,500 Financial Federal Corporation ............................ 24,000 456,000 First Investors Financial Services Group, Inc. (b) ....... 292,600 1,755,600 Indymac Mortgage Holdings, Inc. .......................... 147,250 1,601,344 Mellon Bank Corporation .................................. 5,300 372,988 NAC Re Corp .............................................. 10,475 562,382 Northern Trust Corporation ............................... 41,800 3,712,383 PartnerRe Ltd. ........................................... 131,200 5,313,600 Prison Realty Corporation ................................ 52,100 908,520 Pxre Corporation ......................................... 51,000 918,000 Risk Capital Holdings, Inc. (b) .......................... 14,200 214,775 Scottish Annuity & Life Holdings, Ltd. (b) ............... 146,550 1,428,863 Security Capital U.S. Realty (b) ......................... 983,528 7,720,692 Superior National Insurance Group, Inc. (b) .............. 46,800 889,200 Terra Nova Holdings Ltd., Class A ........................ 51,700 1,130,938 Tokio Marine & Fire Insurance Company, Limited (ADR) ..... 125,000 7,015,625 UICI (b) ................................................. 96,500 2,171,250 Vail Banks, Inc. (b) ..................................... 26,000 312,000 Vesta Insurance Group, Inc. .............................. 7,500 38,438 XL Capital Ltd., Class A ................................. 252,991 15,369,200 ----------- 81,433,206 ----------- Health Care -- 2.05% Johnson & Johnson ........................................ 90,800 8,489,800 Paracelsus Healthcare Corporation (b)(c) ................. 535,443 588,987 Pfizer Inc. .............................................. 50,000 6,937,500 ----------- 16,016,287 -----------
See accompanying Notes to Statement of Investments Baker, Fentress & Company 1st Quarter Report 1999 5 Statement of Investments
March 31, 1999 - Unaudited Shares, Contracts, or Principal Amount Value --------------------- ------------ INVESTMENTS IN UNAFFILIATED ISSUERS (continued) Technology -- 7.78% Adobe Systems Incorporated........................................ 8,700 $ 493,725 First Data Corporation............................................ 217,700 9,306,675 Harris Corporation................................................ 15,900 455,137 International Business Machines Corporation....................... 74,900 13,276,025 Koninklijke Philips Electronics N.V............................... 152,000 12,530,576 Schawk, Inc....................................................... 72,100 702,975 Seagate Technology, Inc. (b)...................................... 214,500 6,341,264 Texas Instruments Incorporated.................................... 179,300 17,795,525 ------------ 60,901,902 ------------ Utilities -- 5.98% Duke Energy Corporation........................................... 152,440 8,355,618 KeySpan Energy Corporation........................................ 563,620 14,160,953 Potomac Electric Power Company.................................... 607,800 14,093,666 The Williams Companies, Inc....................................... 258,400 10,206,800 ------------ 46,817,037 ------------ Total common stock (Cost $349,129,660)......................... 430,525,905 ------------ Preferred Stock -- 3.27% Crown Cork & Seal Company, Inc., 4.50%............................ 188,300 5,131,175 Loral Space & Communications Ltd. (b)............................. 63,100 2,997,250 The News Corporation Limited...................................... 439,700 12,091,750 Owens-Illinois, Inc., 4.75%....................................... 148,500 5,411,043 ------------ Total preferred stock (Cost $25,777,920)....................... 25,631,218 ------------ Convertible Bonds -- 1.82% Hewlett-Packard Company, Zero Coupon Bond due 10/14/2017 (e).............................................. $22,785,000 12,588,713 Hewlett-Packard Company, Zero Coupon Bond due 10/14/2017.................................................. $ 3,000,000 1,657,500 ------------ Total convertible bonds (Cost $14,402,980)..................... 14,246,213 ------------ Purchased Put Options -- 0.03% Expiration Date/ Strike Price ---------------- S&P 500 Index..................................................... Apr 99/1175 1,250 156,250 S&P 500 Index..................................................... May 99/1175 65 69,875 ------------ Total purchased put options (Cost $3,681,697).................. 226,125 ------------ Limited Partnerships -- 0.97% Golder, Thoma, Cressey Fund II Limited Partnership (c)(d)......... 512,831 Penta Japan Domestic Partners, L.P................................ 7,010,343 Phillips-Smith Specialty Retail Group Limited Partnership (c)(d).. 27,732 ------------ Total limited partnerships (Cost $5,202,088)................... 7,550,906 ------------ Total investments in unaffiliated issures (Cost $398,194,345).... 478,180,367 ------------
See accompanying Notes to Statement of Investments 6 Baker, Fentress & Company 1st Quarter Report 1999 Statement of Investments
March 31, 1999 - Unaudited Shares or Principal Amount Value ---------------- ------------ INVESTMENTS IN CONTROLLED AFFILIATES -- 24.82% Wholly-Owned Subsidiary -- 14.69% Levin Management Co., Inc - investment management Common Stock (b)(c)(d).................................................... 1,000 $ 50,000,000 10.25% Notes due 06/28/1999 (c)(d)........................................ $65,000,000 65,000,000 ------------ Total wholly-owned subsidiary (Cost $120,645,890)......................... 115,000,000 ------------ Publicly Traded -- 8.78% Consolidated-Tomoka Land Co., Common Stock (majority-owned) - development of Florida real estate (Cost $5,030,627)....................... 5,000,000 68,750,000 ------------ Other -- 1.35% DuroLite International, Inc. - manufacturer and distributor of specialized lighting products Convertible Preferred Stock (b)(c)(d)...................................... 2,500 1,667,250 12% Subordinated Note due 11/03/2004 (c)(d)................................ $ 8,000,000 7,872,750 DuroLite Europe Holdings, Inc. - subsidiary of DuroLite International, Inc. 23% Promissory Note due 08/20/1999 (c)(d).................................. $ 498,895 498,895 Stock Purchase Warrant expiring 08/20/2008 (b)(c)(d)....................... 1,105 -- E-Sales, Inc. - diversified environmental services marketing organization Convertible Preferred Stock (b)(c)(d)...................................... 500,000 500,000 ------------ Total other (Cost $11,500,000)............................................ 10,538,895 ------------ Total investments in controlled affiliates (Cost $137,176,517)............... 194,288,895 ------------ INVESTMENTS IN NON-CONTROLLED AFFILIATES -- 7.81% Publicly Traded Citadel Communications Corporation - radio broadcasting Common Stock (b)(c)....................................................... 1,839,511 61,163,727 ------------ Total investments in non-controlled affiliates (Cost $1,528,790)............. 61,163,727 ------------ MONEY MARKET SECURITIES -- 3.19% U.S. Treasury bills - 4.304% due 04/08/1999.................................. $25,000,000 24,977,500 ------------ Total investments in money market securities (Cost $24,976,667).............. 24,977,500 ------------ Total Investments -- 96.90% (Cost $561,876,319)...................................... 758,610,489 ------------ Cash and Other Assets, Less Liabilities -- 3.10%..................................... 24,258,617 ------------ NET ASSETS -- 100.00%................................................................ $782,869,106 ============
See accompanying Notes to Statement of Investments Baker, Fentress & Company 1st Quarter Report 1999 7 Notes to Statement of Investments ------------- (a) Based on the cost of investments of $510,971,637 for federal income tax purposes at March 31, 1999, net unrealized appreciation was $247,638,852, which consisted of gross unrealized appreciation of $278,328,347 and gross unrealized depreciation of $30,689,495. (b) Non-income producing security. (c) Securities subject to legal or contractual restrictions on sale are valued at cost on the dates of acquisition and at a fair value determined in good faith by the board of directors of the Company as of March 31, 1999, based upon all factors deemed relevant by the board. The quantitative and qualitative factors considered by the board of directors may include, but are not limited to, type of securities, nature of business, marketability, restrictions on disposition, market price of unrestricted securities of the same issue (if any), comparative valuation of securities of publicly traded companies in the same or similar industries, valuation of recent mergers and acquisitions of similar companies, current financial condition and operating results, sales and earnings growth, operating revenues, competitive conditions, and current and prospective conditions in the overall stock market. The values determined by the board of directors may not reflect amounts that could be realized upon immediate sale, nor amounts that ultimately may be realized. Accordingly, the fair values included in the statement of investments may differ from the values that would have been used had a ready market existed for these securities, and such differences could be significant. The aggregate value of restricted securities was $187,832,172, or 23.99% of net assets, at March 31, 1999. (d) There were no unrestricted securities of the same issue outstanding on March 31, 1999 or the dates of acquisition. (e) Security exempt from registration requirements under Rule 144A of the Securities Act of 1933 which permits resales of eligible securities issued in private placements and other transactions to "Qualified Institutional Investors". Annual Meeting of Shareholders The Annual Meeting of Shareholders was held on April 22, 1999. The results of all matters voted on by shareholders were as follows: A proposal to approve and ratify the selection of Ernst & Young LLP as the Company's independent auditors for 1999 was approved with 35,171,533 votes for, 359,608 votes against, and 129,110 votes abstaining. In addition, shareholders re-elected five directors, as follows:
Nominee For Withheld ----------------- ---------- -------- Eugene V. Fife 34,981,244 679,007 J. Barton Goodwin 34,979,066 681,185 James P. Gorter 34,977,172 683,079 John A. Levin 34,882,415 777,836 Burton G. Malkiel 34,975,457 684,794
The term of office of the following directors continued after the meeting: Frederick S. Addy, Bob D. Allen, David D. Grumhaus, Jeffrey A. Kigner, David D. Peterson, William H. Springer, and Dean J. Takahashi. 8 Baker, Fentress & Company 1st Quarter Report 1999 Portfolio Changes Exceeding $2.5 Million Quarter Ended March 31, 1999 - Unaudited Purchases Cost - --------- ----------- First Union Corporation................... $ 7,957,311 XL Capital Ltd., Class A.................. 7,719,714 Johnson & Johnson......................... 7,249,499 Seagate Technology, Inc................... 6,287,472 BellSouth Corporation..................... 6,143,092 Unocal Corporation........................ 5,737,189 Crown Cork & Seal Company, Inc............ 5,473,911 Tenneco Inc............................... 5,066,989 The Walt Disney Company................... 4,244,300 Ralston Purina Company.................... 4,050,097 Potomac Electric Power Company............ 3,709,123 S&P 500 Index Put Option Apr 99/1175...... 3,531,877 The News Corporation Limited.............. 3,383,439 Nabisco Holdings Corp..................... 3,247,265 Chancellor Media Corporation.............. 2,988,183 Amerada Hess Corporation.................. 2,667,736 ----------- $79,457,197 =========== Sales Proceeds - ----- ----------- Citadel Communications Corporation.... $10,302,012 Eli Lilly and Company................. 8,859,156 First Union Corporation............... 8,047,051 Genentech, Inc........................ 7,993,658 Sealed Air Corporation, $2.00 Series A 7,645,612 Chancellor Media Corporation.......... 7,359,580 Amerada Hess Corporation.............. 5,766,427 Texas Instruments Incorporated........ 4,495,806 United Technologies Corporation....... 4,266,878 The Williams Companies, Inc........... 3,681,912 J.C. Penney Company, Inc.............. 3,639,448 ----------- $72,057,540 =========== Baker Fentress at a Glance Baker, Fentress & Company (BKF), founded in 1891, is a domestic equity closed-end fund that invests for total return with an emphasis on capital appreciation. The Company's principal investments include: . Publicly traded companies with a focus on long-term appreciation and capital preservation . Levin Management Co., Inc., a wholly-owned subsidiary, and its subsidiaries, including John A. Levin & Co., Inc. (Levco) . A majority interest in Consolidated-Tomoka Land Co. Levco manages the Company's portfolio of publicly traded securities. The balance of the portfolio is internally managed by the Company's officers under the supervision of its board of directors. The Company has a policy of distributing annually to shareholders amounts equal to at least 8% of the Company's average net assets. Selected Data As of March 31, 1999 Total net assets................. $782,869,106 Net investment income (YTD)...... $ 4,582,123 Net realized capital gain (YTD).. $ 21,275,531 Unrealized appreciation.......... $196,734,170 Shares outstanding............... 39,029,101 Per Share Net asset value.............. $ 20.06 Market price................. $ 15.0625 Baker, Fentress & Company 1st Quarter Report 1999 9 Directors and Officers BOARD OF DIRECTORS Frederick S. Addy Jeffrey A. Kigner Bob D. Allen John A. Levin Eugene V. Fife Burton G. Malkiel J. Barton Goodwin David D. Peterson James P. Gorter William H. Springer David D. Grumhaus Dean J. Takahashi OFFICERS James P. Gorter Chairman of the Board John A. Levin President and Chief Executive Officer James P. Koeneman Executive Vice President and Secretary Scott E. Smith Executive Vice President Julie A. Heironimus Treasurer and Assistant Secretary Beverly J. Friedberg Assistant Treasurer 10 Baker, Fentress & Company 1st Quarter Report 1999 Baker, Fentress & Company 1st Quarter Report 1999 11 -----END PRIVACY-ENHANCED MESSAGE-----