United States
Securities and Exchange Commission
Washington, DC 20549
FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF
REGISTERED MANAGEMENT INVESTMENT COMPANY
Investment Company Act file number 811-00179
Central Securities Corporation
(Exact name of registrant as specified in charter)
630 Fifth Avenue, Suite 820
New York, N.Y. 10111
(Address of principal executive offices)
Registrant's telephone number including area code: 212-698-2020
Date of fiscal year end: December 31
Date of reporting period: September 30, 2009
Item 1. Schedule of Investments.
CENTRAL SECURITIES CORPORATION
Statement of Investments
September 30, 2009
(Unaudited)
PORTFOLIO SECURITIES 91.1%
STOCKS (COMMON UNLESS SPECIFIED OTHERWISE)
Prin.Amt.
or Shares Value
--------- -----
Banking and Finance 4.2%
675,000 The Bank of New York Mellon Corporation............. $19,568,250
150,000 NewStar Financial, Inc. (a)......................... 493,500
-----------
20,061,750
-----------
Business Services 0.2%
100,000 Heritage-Crystal Clean Inc. (a)..................... 1,275,000
-----------
Communications 1.6%
1,000,000 Arbinet-thexchange, Inc. (a)........................ 2,350,000
200,000 AT&T Inc............................................ 5,402,000
40,000 Vodafone Group PLC.................................. 900,000
-----------
7,752,000
-----------
Electronics 20.5%
920,000 Agilent Technologies, Inc. (a)...................... 25,603,600
370,000 Analog Devices, Inc................................. 10,204,600
831,000 Coherent, Inc. (a).................................. 19,378,920
630,000 Flextronics International Inc. (a).................. 4,706,100
710,000 Intel Corporation................................... 13,894,700
300,000 Maxim Integrated Products, Inc...................... 5,442,000
350,000 Motorola, Inc....................................... 3,006,500
1,000,000 RadiSys Corporation (a)............................. 8,690,000
3,230,000 Sonus Networks, Inc. (a)............................ 6,847,600
-----------
97,774,020
-----------
Energy 10.8%
300,000 Berry Petroleum Company Class A..................... 8,034,000
200,000 Devon Energy Corporation............................ 13,466,000
2,000,000 GeoMet, Inc. (a).................................... 3,380,000
670,000 McMoRan Exploration Co. (a)......................... 5,058,500
300,000 Murphy Oil Corporation.............................. 17,271,000
200,000 Nexen Inc........................................... 4,514,000
-----------
51,723,500
-----------
Health Care 2.3%
120,000 Abbott Laboratories................................. 5,936,400
100,000 Medtronic, Inc...................................... 3,680,000
260,000 Vical Inc. (a)...................................... 1,107,600
-----------
10,724,000
-----------
Information Technology Services 5.1 %
1,700,000 Convergys Corporation (a)........................... 16,898,000
960,000 Xerox Corporation................................... 7,430,400
-----------
24,328,400
-----------
Prin.Amt.
or Shares Value
--------- -----
Insurance 29.5%
10,000 Erie Indemnity Co. Class A....................... $ 374,600
70,000 The Plymouth Rock Company, Inc.
Class A (b)(c)(d)............................ 140,000,000
------------
140,374,600
------------
Manufacturing 14.6%
770,000 Brady Corporation Class A........................ 22,114,400
200,000 Carlisle Companies Inc........................... 6,782,000
400,000 Dover Corporation................................ 15,504,000
200,000 General Electric Co.............................. 3,284,000
100,000 Precision Castparts Corporation.................. 10,187,000
230,000 Roper Industries, Inc............................ 11,725,400
------------
69,596,800
------------
Retailing 1.9%
28,751 AeroGroup International, Inc. (a)(c)(d).......... 324,886
230,000 Walgreen Co...................................... 8,618,100
------------
8,942,986
------------
Miscellaneous 0.4%
Other Investments (e)............................ 1,810,334
------------
Total Portfolio Securities
(cost $270,486,570)......................... 434,363,390
------------
SHORT-TERM INVESTMENTS 8.9%
Money Market Fund 2.6%
12,420,746 Fidelity Institutional Money Market
Government Portfolio 0.10%..................... 12,381,221
------------
U.S. Treasury Obligations 6.3%
31,130,000 U.S. Treasury Bills 0.16% - 0.26%
due 10/22/09 - 3/11/10......................... 30,001,476
------------
Total Short-Term Investments
(cost $42,382,697)........................... 42,382,697
------------
Total Investments
(cost $312,869,267) (100.0%)................. 476,746,087
Cash, receivables and other assets
less liabilities (0.0%)...................... (147,004)
------------
Net Assets (100%)............................. $476,599,083
============
(a) Non-dividend paying.
(b) Affiliate as defined in the Investment Company Act of 1940.
(c) Valued at estimated fair value.
(d) Restricted security. See footnote 3.
(e) Securities which have been held less than one year which have not been
previously disclosed and are not restricted.
See accompanying notes to statement of investments.
CENTRAL SECURITIES CORPORATION
NOTES TO STATEMENT OF INVESTMENTS
1. Security Valuation - Securities are valued at the last sale price or, if
unavailable, at the closing bid price. Corporate discount notes are valued at
amortized cost, which approximates value. Securities for which no ready market
exists are valued at estimated fair value by the Board of Directors.
As of September 30, 2009, the tax cost of investments was $312,869,267. Net
unrealized appreciation was $163,876,820 consisting of gross unrealized
appreciation and gross unrealized depreciation of $222,480,584 and $58,603,764,
respectively.
2. Fair Value Measurements - The Corporation's investments are categorized below
in three broad hierarchical levels based on market price observability as
follows:
o Level 1 - Quoted prices in active markets for identical investments.
The Corporation's Level 1 investments consist of securities listed
on a national securities exchange or NASDAQ national market and
money market funds;
o Level 2 - Other significant observable data obtained from
independent sources; for example, quoted prices for similar
investments or the use of models or other valuation methodologies.
The Corporation's Level 2 investments consist of short-term
investments, carried at amortized cost.
o Level 3 - Significant unobservable inputs including the
Corporation's own assumptions based upon the best information
available. Investments categorized as Level 3 include securities in
which there is little, if any, market activity. The Corporation's
Level 3 investments consist of The Plymouth Rock Company, Inc. and
Aerogroup International, Inc.
The methodology used for valuing securities is not necessarily an indication of
the risk associated with investing in those securities.
The Corporation's investments as of September 30, 2009 are classified as
follows:
Valuation Inputs Investments in Securities
---------------- -------------------------
Level 1 $306,419,725
Level 2 30,001,476
Level 3 140,324,886
------------
$476,746,087
============
The following is a reconciliation of assets in which significant unobservable
inputs (Level 3) were used in determining fair value:
Balance at December 31, 2008 $126,385,838
Change in unrealized appreciation of investments 13,939,048
------------
Balance at September 30, 2009 $140,324,886
============
No Level 3 investments were purchased, sold or transferred to Level 1 or Level 2
during the nine months ended September 30, 2009.
3. Restricted Securities - The Corporation has from time to time invested in
securities the resale of which is restricted. On September 30, 2009, such
investments had an aggregate value of $140,324,886, which was equal to 29.4% of
the Corporation's net assets. Investments in restricted securities at September
30, 2009 were:
Company Shares Security Date Purchased Cost
------- ------ -------- -------------- ----
AeroGroup International, Inc. 28,751 Common Stock 6/14/05 $17,200
The Plymouth Rock Company, Inc. 60,000 Class A Common Stock 12/15/82 1,500,000
The Plymouth Rock Company, Inc. 10,000 Class A Common Stock 6/9/84 699,986
The Corporation does not have the right to demand registration of the restricted
securities.
Item 2. Controls and Procedures.
(a) Disclosure Controls and Procedures. The Principal Executive and Financial
Officers have concluded that the
Registrant's Disclosure Controls and Procedures are effective based on their
evaluation of the Disclosure Controls and Procedures as of a date within 90 days
of the filing date of this report.
(b) Internal Control Over Financial Reporting. During the last fiscal quarter,
there was no significant change in the Registrant's internal control over
financial reporting that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial reporting.
Item 3. Exhibits.
(a) Certifications.
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.
CENTRAL SECURITIES CORPORATION
By: /s/ Wilmot H. Kidd
-----------------------------------
President
Date: October 20, 2009
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/ Wilmot H. Kidd
-----------------------------------
President
Date: October 20, 2009
By: /s/ Charles N. Edgerton
-----------------------------------
Vice President and Treasurer
Date: October 20, 2009