UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-02328
BOULDER GROWTH & INCOME FUND, INC.
-----------------------------------------------------
(Exact name of registrant as specified in charter)
Fund Administrative Services
1680 38th Street, Suite 800
BOULDER, CO 80301
-----------------------------------------------------
(Address of principal executive offices) (Zip code)
Fund Administrative Services
1680 38th Street, Suite 800
BOULDER, CO 80301
-----------------------------------------------------
(Name and address of agent for service)
registrant's telephone number, including area code: 303-444-5483
--------------
Date of fiscal year end: NOVEMBER 31, 2004
------------------
Date of reporting period: MAY 31, 2004
-------------
Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
The Report to Shareholders is attached herewith.
BOULDER GROWTH & INCOME FUND, INC.
Semi Annual Report
May 31, 2004
Dear Shareholder:
Howdy Partners! 1 Let's get right to the meat of this report.
Total Returns
FOR THE PERIODS ENDING MAY 31, 2004
-----------------------------------
BIF NAV BIF NAV Dow Jones
Most WITH WITHOUT S&P 500 Industrial NASDAQ
Recent DILUTION+ DILUTION Index Average Composite
------ --------- -------- ----- ------- ---------
3 Months -5.3% -5.3% -1.7% -3.3% -2.0%
6 Months 7.6% 7.6% 6.8% 5.2% 1.6%
1 Year 26.0% 26.0% 18.3% 17.6% 25.1%
Since 1/02* -4.2% 3.8% 1.4% 3.4% 1.6%
-------------
+ The total returns for BIF include the effect of dilution from the 12/2002
rights offering, effecting only the `Since 1/02' returns.
* Annualized since January 23, 2002, the date the current Advisers became
investment advisers to the Fund.
We're a bit disappointed in our results for the most recent quarter. We
under-performed all of our relevant benchmarks. However, we are comfortable with
the relative results we have achieved since January 23, 2002, when current
management took over, although even 2 1/2 years is a relatively short period of
time. Nevertheless, we seldom pay much attention to short-term results. Contrary
to a lot of contemporary thinking, we believe that the longer the period of
performance you are comparing, the more apt it is to reflect the skill, or lack
thereof, of the manager and the less likely it is to be the result of luck. We
like long periods of success in the "investees" (the securities we buy) and you
will seldom find a turnaround situation in our portfolio. We do invest in
companies and managements that have had a long run of success but may have had a
recent disappointment. We try to judge if the factors causing the disappointment
are temporary and will be successfully resolved by management, or whether the
disappointment will continue. While this is not an easy thing to predict, we
find it far easier to do than to find a start up that will succeed or a company
with a long history of disappointment that all of a sudden is purportedly going
to be a winner. While we can often find glowing stories in this area, they so
seldom pan out that we don't pay much attention to them. We think the same thing
is true with picking good mutual funds.
The Fund's stocks outperformed the S&P 500 Index by 0.8% during the 6 months
ended May 31, 2004. Berkshire Hathaway, still by far the Fund's largest holding
at 27% of assets, was up 6.3% during the period. We sometimes get calls from
people asking: "Do you still hold Berkshire Hathaway?" Asking this question is
somewhat akin to somebody calling Warren Buffet and asking: "Does Berkshire
Hathaway still have Geico Insurance?"
The following are some of the other significant holdings in the Fund and their
returns during the period: USG Corp. was down 7%, Merck was up 2.4% and
Avalonbay Communities was up 13.9%.
------------------
1 IF YOU READ THE 11/30/2003 SHAREHOLDER LETTER, WE SAID WE'D NEVER BE CALLED
"GUNSLINGERS," BUT WE DIDN'T SAY ANYTHING ABOUT USING COWBOY JARGON. BESIDES,
WE REALLY DO CONSIDER YOU PARTNERS.
1
Real Estate Investment Trusts ("REITs") overall were down sharply in April. Take
a look at the table above and you'll see that BIF with a -5.3% return,
under-performed the S&P 500 Index by 3.6% in the latest quarter. Obviously, we
outperformed the S&P 500 Index during the first quarter, since the 6-month
return for BIF is 0.8% greater. Most of this is explained by the Fund's
significant holdings in REITs. When it became a widespread belief that interest
rates were going up, REITs were treated like other interest sensitive assets and
declined dramatically. We have a different view and believe that an improving
economy will benefit the REITs we own in several ways: (1) higher occupancy
rates; (2) higher rental rates--most of our REITs will be able to raise rents
fairly much in line with any increased inflation; and (3) fixed borrowing
costs--most of our REITs have an above average amount of cheap fixed rate
borrowings which will allow them to enjoy a leveraged benefit if the above two
assumptions are correct. We expect that most of our REIT holdings will raise
their earnings and dividends as interest rates increase, and that is why we
bought them in the first place. Consequently, we suffered paper losses in our
REITs, but our holdings were essentially unchanged during this rather abrupt
re-pricing of them. Nonetheless, when REITs went down, the Fund's NAV suffered
as a result. The NAREIT Index, a commonly used REIT index which will be used
here to demonstrate a point, started moving down on April 2, and suddenly
holders of REITs couldn't seem to sell them fast enough. The NAREIT Index
bottomed out on May 10, having gone down some 18% from the high. It has since
recovered with about a 10% increase from the low, but still below the highs it
reached.
NAREIT INDEX - 12/01/03 TO 5/31/04
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
Dec-03 2132
Dec-03 2123
Dec-03 2120
Dec-03 2112
Dec-03 2112
Dec-03 2129
Dec-03 2127
Dec-03 2119
Dec-03 2134
Dec-03 2142
Dec-03 2128
Dec-03 2143
Dec-03 2147
Dec-03 2149
Dec-03 2154
Dec-03 2165
Dec-03 2165
Dec-03 2170
Dec-03 2175
Dec-03 2189
Dec-03 2195
Dec-03 2178
Jan-04 2175
Jan-04 2176
Jan-04 2180
Jan-04 2169
Jan-04 2175
Jan-04 2176
Jan-04 2180
Jan-04 2183
Jan-04 2197
Jan-04 2194
Jan-04 2180
Jan-04 2182
Jan-04 2188
Jan-04 2196
Jan-04 2213
Jan-04 2241
Jan-04 2259
Jan-04 2255
Jan-04 2257
Jan-04 2271
Feb-04 2301
Feb-04 2298
Feb-04 2254
Feb-04 2267
Feb-04 2307
Feb-04 2308
Feb-04 2322
Feb-04 2336
Feb-04 2313
Feb-04 2297
Feb-04 2304
Feb-04 2299
Feb-04 2296
Feb-04 2296
Feb-04 2296
Feb-04 2300
Feb-04 2320
Feb-04 2316
Feb-04 2321
Mar-04 2350
Mar-04 2365
Mar-04 2376
Mar-04 2386
Mar-04 2400
Mar-04 2397
Mar-04 2397
Mar-04 2367
Mar-04 2341
Mar-04 2369
Mar-04 2355
Mar-04 2355
Mar-04 2393
Mar-04 2404
Mar-04 2409
Mar-04 2397
Mar-04 2408
Mar-04 2384
Mar-04 2416
Mar-04 2393
Mar-04 2409
Mar-04 2433
Mar-04 2451
Apr-04 2472
Apr-04 2441
Apr-04 2343
Apr-04 2253
Apr-04 2288
Apr-04 2246
Apr-04 2129
Apr-04 2115
Apr-04 2091
Apr-04 2137
Apr-04 2161
Apr-04 2170
Apr-04 2092
Apr-04 2098
Apr-04 2129
Apr-04 2110
Apr-04 2120
Apr-04 2139
Apr-04 2120
Apr-04 2090
Apr-04 2077
May-04 2108
May-04 2125
May-04 2106
May-04 2104
May-04 2029
May-04 2003
May-04 2022
May-04 2022
May-04 2025
May-04 2048
May-04 2061
May-04 2099
May-04 2054
May-04 2095
May-04 2094
May-04 2117
May-04 2160
May-04 2192
May-04 2202
May-04 2223
The Fund's performance doesn't live and die with the REITs it owns, but with
28.6% invested in them, they do have an impact.
We read lots of annual reports. We read the annual reports of companies the Fund
owns; we read annual reports of some companies we find interesting. And some we
read late at night, when we're having trouble falling asleep. We read the
financials, the footnotes, and one of the things we will usually read is the
shareholder letter from the President or the CEO. If the company's legal
department writes it, then it's usually filled with disclaimers and
definitions--lawyers hate to be misunderstood. But to an investor it won't give
you any of the CEO's thoughts or evaluations of the business. Sometimes, though
not always, you can glean insights from the shareholder letter that is pertinent
to us as investors in the company. Berkshire Hathaway is a golden example of
such a letter. If you've never read one, it is highly recommended reading for
investors.
2
The Fund currently has about 2% of its assets in cash or cash equivalents as of
the date of this letter. We had over 10% in cash, however since the date of this
report we decided to pay down $11 million on the line of credit we had, thus
reducing the Fund's leverage to $9 million, down from $20 million as of May 31,
2004. We always have the option of drawing the $11 million back down again if we
find something to buy. Short-term interest rates have climbed in recent months
in anticipation of the Fed raising interest rates. This has caused an increase
in our cost of leverage. The Fund had been paying in the 2.1% range, but more
recently the cost has jumped to 2.4%.
Our website at WWW.BOULDERFUNDS.NET is an excellent source for information on
the Fund. If you've lost your annual report, or want to read an old one, it's
available on the website. You will also find information about the Boulder
Growth & Income Fund's sister fund - the Boulder Total Return Fund.
/S/ STEWART R. HOREJSI
Stewart R. Horejsi
June 25, 2004
----------------
NOTHING IN THIS SEMI-ANNUAL REPORT SHOULD BE CONSIDERED AS INVESTMENT ADVICE.
THIS LETTER EXPLAINS THE MANAGERS' VIEWS AS OF ITS DATE, WHICH MAY HAVE
SUBSEQUENTLY CHANGED.
3
BOULDER GROWTH & INCOME FUND, INC.
EXHIBIT 1
(UNAUDITED)
CHANGE IN PRINCIPAL VALUE OF ASSET CLASSES 11/30/2003 TO 5/31/2004
COMMON STOCK INVESTMENTS
------------------------
CORPORATE BONDS
REITS INDUSTRIALS & WARRANTS AMPS TOTAL
----------- ----------- --------------- ----------- ------------
Beginning Market Value......... 11/30/2003 $28,926,295 $57,751,690 $107,111 $ -- $ 86,785,096
Cost of Purchases..............12/1/2003 - 05/31/2004 5,052,285 2,923,112 -- 13,000,000 $ 20,975,397
Proceeds from Sales............12/1/2003 - 05/31/2004 6,289,686 4,976,875 -- 4,000,000 $ 15,266,561
----------- ----------- -------- ----------- ------------
Net Purchases / (Sales) ....... (1,237,401) (2,053,763) -- 9,000,000 $ 5,708,836
Beginning Market Value Plus Net Purchases/(Sales) 27,688,894 55,697,927 107,111 9,000,000 92,493,932
----------- ----------- -------- ----------- ------------
Net Appreciation............... 1,214,079 4,619,286 3,121 -- $ 5,836,486
Ending Market Value............ 5/31/2004 28,902,973 60,317,213 110,232 9,000,000 $ 98,330,418
----------- ----------- -------- ----------- ------------
Number of Issues Held.......... 5/31/2004 19 20 2 5
Cash and Other Assets and Liabilities $ 2,481,461
------------
Total Net Assets (including $20,000,000 leverage) $100,811,879
============
The information in the table below is unaudited.
FINANCIAL DATA
PER SHARE OF
COMMON STOCK
-----------------------
NET ASSET NYSE
VALUE CLOSING PRICE
------- ------------
12/31/03 ....................... $6.88 $6.30
1/31/04 ....................... $7.30 $6.46
2/29/04 ....................... $7.54 $6.47
3/31/04 ....................... $7.55 $6.55
4/30/04 ....................... $7.07 $6.23
5/31/04 ....................... $7.13 $5.83
4
BOULDER GROWTH & INCOME FUND, INC. PORTFOLIO OF INVESTMENTS
MAY 31, 2004 (UNAUDITED)
--------------------------------------------------------------------------------
SHARES VALUE
------ -----
DOMESTIC COMMON STOCKS - 105.8%
BEVERAGES - 1.8% Pepsi Bottling Group, Inc. ........................... 50,000 $ 1,450,000
------------
BUILDING MATERIALS - 3.5% USG Corporation+o .................................... 200,000 2,810,000
------------
DIVERSIFIED - 34.1% Berkshire Hathaway Inc., Class A+o ................... 310 27,590,000
------------
FINANCIAL SERVICES - 6.4% Federated Investors, Inc. ............................ 40,000 1,191,200
H&R Block, Inc. ...................................... 45,000 2,198,250
Providian Financial Corporation+o .................... 130,000 1,768,000
------------
TOTAL FINANCIAL SERVICES 5,157,450
------------
FOOD-MISC/DIVERSIFIED - 1.7% Sara Lee Corporation ................................. 60,000 1,374,000
------------
HEALTH CARE PRODUCTS &
SERVICES - 1.3% AmerisourceBergen Corporation ........................ 18,000 1,079,640
------------
INDUSTRIAL - 2.6% Eastman Kodak Company ................................ 80,000 2,094,400
------------
INSURANCE - 6.6% AON Corporation ...................................... 45,000 1,243,350
Fidelity National Financial, Inc. .................... 38,500 1,447,215
First American Corporation ........................... 40,000 1,038,400
Torchmark Corporation ................................ 30,000 1,625,700
------------
TOTAL INSURANCE 5,354,665
------------
PHARMACEUTICALS - 9.2% Bristol-Meyers Squibb Companyo ....................... 82,000 2,072,140
Merck & Company, Inc.o ............................... 65,000 3,074,500
Pfizer, Inc. ......................................... 66,000 2,332,440
------------
TOTAL PHARMACEUTICALS 7,479,080
------------
REITS - 35.8% Archstone-Smith Realty Trust ......................... 70,000 2,033,500
Arden Realty Inc. .................................... 45,000 1,334,250
AvalonBay Communities Inc. ........................... 69,000 3,757,050
Boston Properties, Inc. .............................. 6,100 301,096
Boykin Lodging Company+ .............................. 178,900 1,311,337
Equity Residential Properties Trust .................. 40,000 1,177,600
First Industrial Realty Trust, Inc. .................. 26,000 931,840
Gables Residential Trust ............................. 20,000 675,000
Health Care Property Investors Inc.o ................. 82,000 1,970,460
Healthcare Realty Trust Inc. ......................... 33,000 1,206,150
Hospitality Properties Trust ......................... 34,000 1,391,620
HRPT Properties Trusto ............................... 260,000 2,561,000
Liberty Property Trust ............................... 19,000 757,910
Pan Pacific Retail Properties, Inc. .................. 30,000 1,380,000
Post Properties, Inc. ................................ 78,000 2,269,800
Prentiss Properties Trust ............................ 56,600 1,867,800
Regency Centers Corporation .......................... 40,000 1,612,000
Simon Property Group Inc. ............................ 13,000 670,410
Vornado Realty Trust ................................. 31,000 1,694,150
------------
TOTAL REITS 28,902,973
------------
SAVINGS & LOAN
COMPANIES - 2.8% Washington Mutual, Inc. .............................. 51,000 2,227,680
------------
TOTAL DOMESTIC COMMON STOCKS
(Cost $69,588,069) ...................................................................... 85,519,888
------------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
5
BOULDER GROWTH & INCOME FUND, INC. PORTFOLIO OF INVESTMENTS
MAY 31, 2004 (UNAUDITED)
--------------------------------------------------------------------------------
SHARES VALUE
------ -----
FOREIGN COMMON STOCKS - 4.6%
NETHERLANDS - 2.9% Heineken NV .......................................... 31,250 $ 1,033,398
Unilever NV, ADR ..................................... 20,000 1,319,400
------------
TOTAL NETHERLANDS 2,352,798
------------
UNITED KINGDOM - 1.7% Diageo PLC, Sponsored ADR ............................ 25,000 1,347,500
------------
TOTAL FOREIGN COMMON STOCKS
(Cost $3,101,488) 3,700,298
------------
AUCTION MARKET PREFERRED SECURITIES- 11.1%
Cohen & Steers Advantage Income Realty Fund, Inc.,
Series TH ........................................... 80 2,000,000
Cohen & Steers Premium Income Realty Fund Inc.,
Series M ............................................ 120 3,000,000
Pimco Corporate Opportunity Fund, Series M ........... 40 1,000,000
Preferred Income Strategies Fund, Inc., Series M ..... 40 1,000,000
Scudder RREEF Real Estate Fund II, Series TH7 ........ 80 2,000,000
------------
TOTAL AUCTION MARKET PREFERRED SECURITIES
(Cost $9,000,000) ....................................................... 9,000,000
------------
WARRANTS - 0.0%**
(Cost $0)
ONO Finance Certificate, Warrant, Expires 05/31/09+*** 1,500 15
------------
PAR
-------
CORPORATE BONDS - 0.1%
(Cost $120,000)
AIRLINES - 0.1% American Airlines Inc., Pass-through Certificates,
7.800% due 10/01/06 ................................ $ 120,000 110,217
------------
U.S. TREASURY BILLS - 2.5%
(Cost $1,999,573)
0.855% due 06/10/04++ .............................. 2,000,000 1,999,573
------------
REPURCHASE AGREEMENT - 1.0%
(Cost $791,000)
Agreement with PNC Capital Markets, 0.850% dated
05/28/04 to be repurchased at $791,075 on
06/01/04, collateralized by $800,000 U.S. Treasury
Bills, 1.500% due 11/18/04 (Value $794,800) ........................ 791,000
------------
TOTAL INVESTMENTS (COST $84,600,130*) - 125.1% ............................................................. 101,120,991
OTHER ASSETS AND LIABILITIES - (25.1%) ..................................................................... (20,309,112)
------------
NET ASSETS - 100.0% ........................................................................................ $ 80,811,879
============
-----------
* Aggregate cost for Federal tax purposes.
** Amount represents less than 0.1% of net assets.
*** Security is a private placement.
o At May 31, 2004, securities or a partial position of these securities
were pledged as collateral for the loan outstanding. These securities
held with the custodian as segregated assets, have an aggregate market
value of $40,663,600.
+ Non-income producing security.
++ Annualized yield at date of purchase.
ADR American Depository Receipt
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
6
BOULDER GROWTH & INCOME FUND, INC.
--------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
--------------------------------------------------------------------------------
MAY 31, 2004 (UNAUDITED)
ASSETS:
Investments, at value (Cost $84,600,130) (Note 1)
See accompanying schedule ................................................................... $ 101,120,991
Cash ........................................................................................... 11
Dividends and interest receivable .............................................................. 122,445
Prepaid expenses ............................................................................... 51,607
--------------
TOTAL ASSETS ............................................................................. 101,295,054
LIABILITIES:
Loan payable to bank (Note 9) ................................................. $ 20,000,000
Investment co-advisory fees payable (Note 2) .................................. 104,358
Deferred compensation - director (Note 10) .................................... 100,325
Administration and co-administration fees payable (Note 2) .................... 23,379
Legal fees payable ............................................................ 22,627
Interest due on loan payable to bank (Note 9) ................................. 19,022
Audit fees payable ............................................................ 18,750
Accrued expenses and other payables ........................................... 194,714
-------------
TOTAL LIABILITIES ........................................................................ 20,483,175
--------------
NET ASSETS ........................................................................................ $ 80,811,879
==============
NET ASSETS consist of:
Accumulated net investment loss ................................................................ $ (189,666)
Accumulated net realized loss on investments sold .............................................. (18,182,599)
Unrealized appreciation of investments ......................................................... 16,520,861
Par value of Common Stock (Note 4) ............................................................. 113,278
Paid-in capital in excess of par value of Common Stock (Note 4) ................................ 82,550,005
--------------
TOTAL NET ASSETS ......................................................................... $ 80,811,879
==============
NET ASSET VALUE
(Net Asset Value, $80,811,879/11,327,784 shares outstanding) ...................................... $ 7.13
==============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
7
BOULDER GROWTH & INCOME FUND, INC.
--------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
--------------------------------------------------------------------------------
FOR THE SIX MONTHS ENDED MAY 31, 2004 (UNAUDITED)
INVESTMENT INCOME:
Dividends (net of foreign withholding taxes of $1,793) ........................................ $ 1,211,562
Interest ...................................................................................... 19,741
------------
TOTAL INVESTMENT INCOME ................................................................ 1,231,303
EXPENSES:
Investment co-advisory fees (Note 2) . ....................................... $ 632,142
Administration and co-administration fees (Note 2) ........................... 159,270
Legal and audit fees ......................................................... 79,537
Insurance expenses ........................................................... 28,408
Printing fees ................................................................ 26,297
Directors fees and expenses (Note 2) ......................................... 17,109
Other ........................................................................ 139,212
Fees waived by the Administrator ............................................. (23,574)
------------
OPERATING EXPENSES ........................................................... 1,058,401
Interest on outstanding loan payable (Note 9) ................................ 194,990
------------
TOTAL EXPENSES ......................................................................... 1,253,391
------------
NET INVESTMENT LOSS ............................................................................. (22,088)
------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain/(loss) on:
Securities ............................................................................. 3,121,718
Foreign currencies and net other assets ................................................ (5,334)
------------
Net realized gain on investments during the period ............................................ 3,116,384
------------
Change in unrealized appreciation of investments during the period ............................ 2,714,718
------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS ................................................. 5,831,102
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ............................................ $ 5,809,014
============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
8
BOULDER GROWTH & INCOME FUND, INC.
--------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
SIX MONTHS ENDED
MAY 31, 2004 YEAR ENDED
(UNAUDITED) NOVEMBER 30, 2003
---------------- -----------------
OPERATIONS:
Net investment income/(loss) ................................................ $ (22,088) $ 63,621
Net realized gain/(loss) on investments sold during the period .............. 3,116,384 (8,075,680)
Change in unrealized appreciation of investments during the period .......... 2,714,718 22,303,711
-------------- ---------------
Net increase in net assets resulting from operations ........................ 5,809,014 14,291,652
DISTRIBUTIONS:
Dividends paid from net investment income to shareholders ................... (283,195) (736,306)
-------------- ---------------
TOTAL DISTRIBUTIONS ........................................................... (283,195) (736,306)
CAPITAL SHARE TRANSACTIONS:
Proceeds from Rights Offering (Note 8) ...................................... -- 24,581,291
Expenses incurred for Rights Offering (Note 8) .............................. -- (159,614)
-------------- ---------------
NET INCREASE IN NET ASSETS FOR THE PERIOD ..................................... 5,525,819 37,977,023
NET ASSETS:
Beginning of period ......................................................... 75,286,060 37,309,037
-------------- ---------------
End of period (including undistributed net investment income/
(accumulated net investment loss) of ($189,666) and $115,617,
respectively) ............................................................ $ 80,811,879 $ 75,286,060
============== ===============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
9
BOULDER GROWTH & INCOME FUND, INC.
--------------------------------------------------------------------------------
STATEMENT OF CASH FLOWS
--------------------------------------------------------------------------------
FOR THE SIX MONTHS ENDED MAY 31, 2004 (UNAUDITED)
Cash flows from operating activities:
Investment income received ............................... $ 15,089
Dividend income received ................................. 1,229,394
Payment of operating expenses ............................ (999,775)
Proceeds from sales of long-term securities .............. 15,261,227
Purchases of long-term securities ........................ (20,975,397)
Net proceeds from short-term investments ................. 5,965,282
--------------
CASH PROVIDED BY OPERATING ACTIVITIES ....................... $ 495,820
Cash flows from financing activities:
Distributions paid ....................................... (283,195)
Interest expense ......................................... (213,333)
--------------
CASH USED BY FINANCING ACTIVITIES ........................... (496,528)
------------
Decrease in cash ......................................... (708)
Cash at beginning of period .............................. 719
------------
Cash at end of period .................................... $ 11
============
RECONCILIATION OF NET INCREASE IN NET ASSETS FROM OPERATIONS
TO CASH PROVIDED BY OPERATING ACTIVITIES:
Net increase in net assets resulting from operations ........ $ 5,809,014
Increase in investments* ................................. $ (5,584,431)
Decrease in interest and dividends receivable ............ 17,621
Increase in other assets ................................. (12,333)
Increase in accrued expenses ............................. 70,959
Interest expense ......................................... 194,990
--------------
CASH PROVIDED BY OPERATING ACTIVITIES ....................... $ 495,820
============
-----------
* Includes unrealized appreciation of $16,520,861.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
10
BOULDER GROWTH & INCOME FUND, INC.
FINANCIAL HIGHLIGHTS
FOR A COMMON SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
Contained below is per share operating performance data, total investment
returns, ratios to average net assets and other supplemental data. This
information has been derived from information provided in the financial
statements and market price data for the Fund's shares.
SIX MONTHS YEAR FIVE MONTH
ENDED ENDED PERIOD ENDED
MAY 31, 2004 NOVEMBER 30, NOVEMBER 30, YEAR ENDED JUNE 30,
--------------------------------------------
(UNAUDITED) 2003 2002(B) 2002 2001 2000 1999
--------- ---------- ---------- ------- ------- ------- -------
OPERATING PERFORMANCE:
Net asset value, beginning of period. $ 6.65 $ 6.59 $ 7.15 $ 8.65 $ 8.96 $ 10.07 $ 10.75
--------- ---------- ---------- ------- ------- ------- -------
Net investment income/(loss)......... (0.00)(d) (0.03) 0.02 0.58 0.70 0.67 0.78
Net realized and unrealized gain/(loss)
on investments................. 0.51 1.23 (0.58) (1.49) (0.31) (1.02) (0.70)
--------- ---------- ---------- ------- ------- ------- -------
Total from investment operations..... 0.51 1.20 (0.56) (0.91) 0.39 (0.35) 0.08
--------- ---------- ---------- ------- ------- ------- -------
DISTRIBUTIONS:
Dividends paid from net investment
income to shareholders......... (0.03) (0.07) -- (0.59) (0.70) (0.76) (0.76)
--------- ---------- ---------- ------- ------- ------- -------
Total distributions.................. (0.03) (0.07) -- (0.59) (0.70) (0.76) (0.76)
--------- ---------- ---------- ------- ------- ------- -------
Accretive/(Dilutive) Impact of the
Rights Offering ++............. -- (1.07) -- -- -- -- --
--------- ---------- ---------- ------- ------- ------- -------
Net asset value, end of period....... $ 7.13 $ 6.65 $ 6.59 $ 7.15 $ 8.65 $ 8.96 $ 10.07
========= ========== ========== ======= ======= ======= =======
Market value, end of period.......... $ 5.83 $ 5.50 $ 5.22 $ 6.78 $ 8.50 $ 8.25 $ 9.63
========= ========== ========== ======= ======= ======= =======
Total investment return based on net
asset value(a)(c) ............. 7.64% 2.37% (7.83)% (11.36)% 4.41% (3.70)% 0.64%
========= ========== ========== ======= ======= ======= =======
Total investment return based on
market value(a)(c)............. 6.42% 6.89% (23.01)% (14.47)% 11.77% (6.81)% 7.85%
========= ========== ========== ======= ======= ======= =======
RATIOS AND SUPPLEMENTAL DATA:
Ratio of operating expenses to average
net assets..................... 2.09%+++ 1.93% 4.40%+++ 1.95%+ 1.82%+ 2.51%+ 1.12%
Ratio of operating expenses to average
net assets without fee waivers. 2.52%+++ -- -- -- -- -- --
Ratio of operating expenses including
interest expense to average net
assets......................... 2.48%+++ 2.30% -- -- -- -- --
Ratio of net investment income/(loss) to
average net assets............. (0.04)%+++ 0.08% 0.79%+++ 6.96% 8.03% 7.08% 7.46%
SUPPLEMENTAL DATA:
Portfolio turnover rate.............. 16% 40% 21% 180% 83% 53% 58%
Net assets, end of period (in 000's). $ 80,812 $ 75,286 $ 37,309 $40,514 $ 48,990 $ 50,591 $ 56,841
Number of shares outstanding at end of
period (in 000's).............. 11,328 11,328 5,664 5,664 5,664 5,644 5,644
----------------------------------------
(a) Assumes reinvestment of distributions at the price obtained by the Fund's
Dividend Reinvestment Plan.
(b) Fiscal year end changed to November 30. Prior to this, the fiscal year end
was June 30.
(c) Total return is not annualized for periods less than one year.
(d) Amount represents less than $0.01 per share.
+ For the years ended June 30, 2002, 2001 and 2000, the ratio of expenses to
average net assets excluding the costs attributable to a proxy contest and
related matters was 1.65%, 1.26% and 1.55%, respectively.
++ The Rights Offering was fully subscribed at a subscription price of $4.34 at
5,663,892 shares which equals $24,581,291 in gross proceeds. The Rights
Offering had a $(1.06) NAV impact and the $159,614 expenses associated with
the Rights Offering had a $(0.01) NAV impact.
+++ Annualized.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
11
BOULDER GROWTH & INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES
Boulder Growth & Income Fund, Inc. (the "Fund"), is registered under the
Investment Company Act of 1940, as amended, as a closed-end, non-diversified
management investment company. The policies described below are followed
consistently by the Fund in the preparation of its financial statements in
conformity with accounting principles generally accepted in the United States of
America.
PORTFOLIO VALUATION: The net asset value of the Fund is determined by the
Fund's administrator no less frequently than on the last business day of each
week and month. It is determined by dividing the value of the Fund's net assets
by the number of shares of Common Stock outstanding. The value of the Fund's net
assets is deemed to equal the value of the Fund's total assets less the Fund's
liabilities. Securities listed on a national securities exchange are valued on
the basis of the last sale on such exchange or the NASDAQ Official Close Price
("NOCP") on the day of valuation. In the absence of sales of listed securities
and with respect to securities for which the most recent sale prices are not
deemed to represent fair market value and unlisted securities (other than money
market instruments), securities are valued at the mean between the closing bid
and asked prices, or based on a matrix system which utilizes information (such
as credit ratings, yields and maturities) from independent sources. Investments
for which market quotations are not readily available are valued at fair value
as determined in good faith by or under the direction of the Board of Directors
of the Fund, including reference to valuations of other securities which are
considered comparable in quality, maturity and type. Investments in money market
instruments, which mature in 60 days or less at the time of purchase, are valued
at amortized cost.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded as of the trade date. Realized gains and losses from securities sold
are recorded on the identified cost basis. Dividend income is recorded on
ex-dividend dates. Interest income is recorded on the accrual basis, with
premiums and discounts being amortized or accreted, respectively.
Cash distributions received from the Fund's investment in real estate
investment trusts ("REITs") and registered investment companies ("RICs") are
recorded as income. A portion of these distributions are returns of capital. As
of May 31, 2004, all accumulated net realized gains relating to returns of
capital from REIT distributions have been reclassified to unrealized gain.
REPURCHASE AGREEMENTS: The Fund may engage in repurchase agreement
transactions. The Fund's Management reviews and approves periodically the
eligibility of the banks and dealers with which the Fund enters into repurchase
agreement transactions. The value of the collateral underlying such transactions
is at least equal at all times to the total amount of the repurchase
obligations, including interest. The Fund maintains possession of the collateral
and, in the event of counterparty default, the Fund has the right to use the
collateral to offset losses incurred. There is the possibility of loss to the
Fund in the event the Fund is delayed or prevented from exercising its rights to
dispose of the collateral securities.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: Dividends from net investment
income, if any, are declared and paid annually. Distributions to shareholders
are recorded on the ex-dividend date. Any net realized short-term capital gains
will be distributed to shareholders at least annually. Any net realized
long-term capital gains may be distributed to shareholders at least annually or
may be retained by the Fund as determined by the Fund's Board of Directors.
Capital gains retained by the Fund are subject to tax at the corporate tax rate.
Subject to the Fund qualifying as a registered investment company, any taxes
paid by the Fund on such net realized long-term gains may be used by the Fund's
Shareholders as a credit against their own tax liabilities.
FEDERAL INCOME TAXES: The Fund intends to qualify as a registered
investment company by complying with the requirements under subchapter M of the
Internal Revenue Code of 1986, as amended, applicable to RICs and intends to
distribute substantially all of its taxable net investment income to its
shareholders. Therefore, no Federal income tax provision is required.
Income and capital gain distributions are determined and characterized in
accordance with income tax regulations, which may differ from generally accepted
accounting principles. These differences are primarily due to (1) differing
treatments of income and gains on various investment securities held by the
Fund, including timing differences, (2) the attribution of expenses against
certain components of taxable investment income, and (3) federal regulations
requiring proportional allocation of income and gains to all classes of
Shareholders. The Internal Revenue Code of 1986, as amended, imposes a 4%
nondeductible excise tax on the Fund to the extent the Fund does not distribute
by the end of any calendar year at least (1) 98% of the sum of its net
investment income for that year and its capital gains (both long term and short
term) for its fiscal year and (2) certain undistributed amounts from previous
years.
CASH: Cash as used in the Statement of Cash Flows is the amount reported in
the Statements of Assets and Liabilities. Information on cash payments or any
cash movement is presented in the Statement of Cash Flows. Accounting practices
that do not affect reporting activities on a cash basis include unrealized gain
or loss on investment securities and accretion income recognized on investment
securities.
12
BOULDER GROWTH & INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED)
OTHER: The preparation of financial statements in accordance with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts and disclosures in the financial statements. Actual results could differ
from those estimates.
2. INVESTMENT CO-ADVISORY FEES, DIRECTORS' FEES, ADMINISTRATION FEE,
CO-ADMINISTRATION FEE, CUSTODY FEE AND TRANSFER AGENT FEE
Boulder Investment Advisers, L.L.C. ("BIA") and Stewart Investment Advisers
("SIA") serve as the Fund's Co-Investment Advisers ("Advisers"). The Fund pays
the Advisers a monthly fee at an annual rate of 1.25% of the value of the Fund's
average monthly net assets. The equity owners of BIA are Evergreen Atlantic,
LLC, a Colorado limited liability company ("EALLC"), and the Lola Brown Trust
No. 1B (the "Lola Trust"), each of which is considered to be an "affiliated
person" of the Fund as that term is defined in the 1940 Act. Stewart West Indies
Trading Company, Ltd. is a Barbados international business company doing
business as Stewart Investment Advisers. SIA receives a monthly fee equal to 75%
of the fees earned by the Advisers, and BIA receives 25% of the fees earned by
the Advisers. The equity owner of SIA is the Stewart West Indies Trust,
considered to be an "affiliated person" of the Fund as that term is defined in
the 1940 Act. The Advisers agreed to waive one half of their fee on the proceeds
from the December 2002 rights offering, and on the proceeds from the $20 million
Line of Credit with Custodial Trust Company of Bear Stearns on April 16, 2003,
until such time as more than 50% of the respective proceeds plus cash on hand at
the time the proceeds were received, are invested, which has since then
occurred.
Fund Administrative Services, LLC ("FAS") serves as the Fund's
Administrator. Under the Administration Agreement, FAS provides certain
administrative and executive management services to the Fund including:
providing the Fund's principal offices and executive officers, overseeing and
administering all contracted service providers, making recommendations to the
Board regarding policies of the Fund, conducting shareholder relations,
authorizing expenses and other administrative tasks. As of February 1, 2004,
under the Co-Administration Agreement, the Fund pays FAS a monthly fee
calculated at an annual rate of 0.20% of the value of the Fund's average monthly
net assets up to $250 million; 0.18% of the Fund's average monthly net assets on
the next $150 million; and, 0.15% on the value of the Fund's average monthly net
assets over $400 million. Notwithstanding, FAS has agreed to cap the Fund's
total administration costs at 0.30% (including administration and
co-administration, transfer agent, and custodian fees). As such, FAShas agreed
to waive a portion of its fees should the total monthly administration expenses
exceed 0.30%. Prior to February 1, 2004, the Fund paid FAS a monthly fee,
calculated at an annual rate of 0.30% of the value of the Fund's average monthly
net assets out of which FAS was required to pay any fees for outsourcing any
administrative, custodial or transfer agency services, which it had done. The
equity owners of FAS are EALLC and the Lola Trust, each of which is considered
to be an "affiliated person" of the Fund as that term is defined in the 1940
Act.
The Fund pays each Director who is not a director, officer or employee of
the Advisers or FAS a fee of $8,000 per annum, plus $3,000 for each in-person
meeting of the Board of Directors and $500 for each telephone meeting. In
addition, the Chairman of the Board and the Chairman of the Audit Committee
receive $1,000 per meeting and each member of the Audit Committee receives $500
per meeting. The Fund will also reimburse all Directors for travel and
out-of-pocket expenses incurred in connection with such meetings.
PFPC Inc. ("PFPC"), an indirect, majority-owned subsidiary of The PNC
Financial Services Group Inc., serves as the Fund's Co-administrator and
Transfer Agent. As Co-administrator, PFPC calculates the net asset value of the
Fund's shares and generally assists in all aspects of the Fund's administration
and operation. The Fund pays PFPC a fee on a monthly basis based on average net
assets. PFPC Trust Company, an indirect subsidiary of The PNC Financial Services
Group Inc., serves as the Fund's Custodian. As compensation to PFPC Trust
Company, the Fund pays PFPC Trust Company a monthly fee based on the Fund's
monthly gross assets.
3. PURCHASES AND SALES OF SECURITIES
Cost of purchases and proceeds from sales of securities for the six months
ended May 31, 2004, excluding short-term investments, aggregated $20,975,397 and
$15,266,561 respectively.
At May 31, 2004, aggregate gross unrealized appreciation for all securities
in which there is an excess of value over tax cost was $16,858,763 and aggregate
gross unrealized depreciation for all securities in which there is an excess of
tax cost over value was $337,902.
4. COMMON STOCK
At May 31, 2004, 250,000,000 shares of $0.01 par value Common Stock were
authorized.
13
BOULDER GROWTH & INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED)
5. PORTFOLIO INVESTMENTS, CONCENTRATION AND INVESTMENT QUALITY
The Fund operates as a "non-diversified" investment company, as defined in
the 1940 Act. As a result of being "non-diversified", with respect to 50% of the
Fund's portfolio, the Fund must limit to 5% the portion of its assets invested
in the securities of a single issuer. There are no such limitations with respect
to the balance of the Fund's portfolio, although no single investment can exceed
25% of the Fund's total assets at the time of purchase. A more concentrated
portfolio may cause the Fund's net asset value to be more volatile than it has
been historically and thus may subject shareholders to more risk. The Fund may
hold a substantial position (up to 25% of its assets) in the common stock of a
single issuer. As of May 31,2004, the Fund held a significant position in
Berkshire Hathaway, Inc., and thus, the volatility of the Fund's common stock,
and the Fund's net assets value and its performance in general, depends
disproportionately more on the performance of this single issuer than that of a
more diversified fund.
At the April 2003 shareholder meeting, Shareholders approved a proposal
that permits the Fund to be concentrated in REITs (real estate investment
trusts). REITs are securities of companies whose primary objective is investment
in real property or providing services to real property interests. The Fund must
invest at least 25% of its assets in REIT securities. The Fund intends to invest
in REIT securities primarily for income. Risks associated with investing in
REITs include the potential for loss of value if there is an underlying decline
in value of the properties in which the REIT invests. Property valuations may
rise and fall with either local economic conditions or with the national
economy. Furthermore, the dividend income paid by a REIT may be reduced or
eliminated. In addition, the Fund bears its ratable share of REIT expenses while
still paying management fees on the Fund assets so invested.
The Fund intends to concentrate its common stock investments in a few
issuers and to take large positions in those issuers, consistent with being a
"non-diversified" fund. As a result, the Fund is subject to a greater risk of
loss than a diversified fund or a fund that has diversified its investments more
broadly. Taking larger positions is also likely to increase the volatility of
the Fund's net asset value reflecting fluctuation in the value of large Fund
holdings. Under normal market conditions, the Fund intends to invest at least
80% of its net assets in common stocks. Common stocks include dividend-paying
closed-end funds and REITs. The portion of the Fund's assets that are not
invested in common stocks may be invested in fixed income securities and cash
equivalents. The term "fixed income securities" includes RICs whose objective is
income, REITs, bonds, U.S. Government securities, notes, bills, debentures,
preferred stocks, convertible securities, bank debt obligations, repurchase
agreements and short-term money market obligations.
6. SIGNIFICANT SHAREHOLDERS
On May 31, 2004, trusts and other entities affiliated with Stewart R.
Horejsi and the Horejsi family owned 2,354,600 shares of Common Stock of the
Fund, representing approximately 20.79% of the total Fund shares.
7. SHARE REPURCHASE PROGRAM:
In accordance with Section 23(c) of the Investment Company Act of 1940, as
amended, the Fund hereby gives notice that it may from time to time repurchase
shares of the Fund in the open market at the option of the Board of Directors
and upon such terms as the Directors shall determine.
8. RIGHTS OFFERING
On October 15, 2002 the Fund's shareholders approved a transferable rights
offering which would permit shareholders to acquire one new share of the Fund
for each share held. The rights were transferable, which allowed shareholders
who did not wish to exercise their rights to sell them on the New York Stock
Exchange. The record date for determining shareholders eligible to participate
in the rights offering was November 29, 2002. The subscription period was from
December 2, 2002 to December 20, 2002. The Market price for the shares issued
through the rights offering was calculated based on the volume-weighted average
closing price of the Fund's shares from December 16 through December 20, 2002.
The rights offering was fully subscribed and the Fund issued 5,663,892 new
shares at a price of $4.34 each. The total gross proceeds to the Fund were
$24,581,291. As of November 30, 2003, the expense associated with the rights
offering totaled $159,614.
9. LOAN OUTSTANDING
The Fund has a credit agreement with the Custodial Trust Company of Bear
Stearns, in which the Fund may borrow from the Custodial Trust Company an
aggregate amount of up to the lesser of $20,000,000 or the maximum amount the
Fund is permitted to borrow under the Investment Company Act of 1940. At May 31,
2004, the Fund had a loan payable in the amount of $20,000,000 with a weighted
average interest rate of 1.09%, calculated at a rate per annum during each
Interest Period equal to 30-day LIBOR on the Interest Commencement Date of such
Interest Period plus 1%. This loan has no maturity date and can be paid or
called at any time.
14
BOULDER GROWTH & INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED)
10. DEFERRED COMPENSATION
At May 31, 2004, the Fund had a deferred compensation liability to a former
Director of the Fund which totaled $100,325 including any accrued interest.
11. CHANGE OF DIRECTOR
On May 18, 2004, Susan L. Ciciora did not stand for re-election as Director
of the Fund. In her place, the Nominating Committee recommended John S. Horejsi.
At the same meeting, shareholders elected John S. Horejsi to serve a one year
term as Director to the Fund.
ADDITIONAL INFORMATION
PRIVACY STATEMENT
Pursuant to SEC Regulation S-P (Privacy of Consumer Financial Information)
the Directors of the Boulder Growth & Income Fund, Inc. have established the
following policy regarding information about the Fund's shareholders. We
consider all shareholder data to be private and confidential, and we hold
ourselves to the highest standards in its safekeeping and use. The Fund collects
nonpublic information (e.g., your name, address, Social Security Number, Fund
holdings) about shareholders from transactions in Fund shares. The Fund will not
release information about current or former shareholders (except as permitted by
law) unless one of the following conditions is met: (i) we receive your prior
written consent; (ii) we believe the recipient to be you or your authorized
representative; or (iii) we are required by law to release information to the
recipient. The Fund has not and will not in the future give or sell information
about its current or former shareholders to any company, individual, or group
(except as permitted by law). The Fund will only use information about its
shareholders as necessary to service or maintain shareholder accounts in the
ordinary course of business. Internally, we also restrict access to shareholder
personal data to those who have a specific need for the records. We maintain
physical, electronic and procedural safeguards that comply with Federal
standards to guard your personal data.
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Fund uses to
determine how to vote proxies relating to portfolio securities is available (1)
without charge, upon request, by calling 800-331-1710 and (2) on the Securities
and Exchange Commission's website at http://www.sec.gov, when required to be
filed pursuant to applicable regulations.
15
BOULDER GROWTH & INCOME FUND, INC.
MEETING OF SHAREHOLDERS -- VOTING RESULTS (UNAUDITED)
On May 18, 2004, the Fund held its Annual Meeting of Shareholders to
consider the election of Directors of the Fund and certain corporate governance
proposals. The following votes were recorded:
PROPOSAL 1: (VOTING BY ALL SHAREHOLDERS):
ELECTION OF RICHARD I. BARR AS DIRECTOR OF THE FUND # OF VOTES CAST % OF VOTES CAST
--------------------------------------------------- ------------------ -----------------
Affirmative ................................................................ 10,208,483.0000 96.4
Withheld ................................................................... 383,304.0000 3.6
---------------- -----
TOTAL ............................................................. 10,591,787.0000 100.0
================ =====
ELECTION OF JOEL W. LOONEY AS DIRECTOR OF THE FUND # OF VOTES CAST % OF VOTES CAST
-------------------------------------------------- ------------------ -----------------
Affirmative ................................................................ 10,208,484.0000 96.4
Withheld ................................................................... 383,303.0000 3.6
---------------- -----
TOTAL ............................................................. 10,591,787.0000 100.0
================ =====
ELECTION OF ALFRED G. ALDRIDGE, JR. AS DIRECTOR OF THE FUND # OF VOTES CAST % OF VOTES CAST
----------------------------------------------------------- ------------------ -----------------
Affirmative ................................................................ 10,207,384.0000 96.4
Withheld ................................................................... 384,403.0000 3.6
---------------- -----
TOTAL ............................................................. 10,591,787.0000 100.0
================ =====
ELECTION OF JOHN S. HOREJSI AS DIRECTOR OF THE FUND # OF VOTES CAST % OF VOTES CAST
--------------------------------------------------- ------------------ -----------------
Affirmative ................................................................ 10,188,005.0000 96.2
Withheld ................................................................... 403,782.0000 3.8
---------------- -----
TOTAL ............................................................. 10,591,787.0000 100.0
================ =====
ELECTION OF STEPHEN C. MILLER AS DIRECTOR OF THE FUND # OF VOTES CAST % OF VOTES CAST
----------------------------------------------------- ------------------ -----------------
Affirmative ................................................................ 10,208,009.0000 96.4
Withheld ................................................................... 383,778.0000 3.6
---------------- -----
TOTAL ............................................................. 10,591,787.0000 100.0
================ =====
PROPOSAL 2: (VOTING BY ALL SHAREHOLDERS):
AMENDMENT TO THE FUND'S CHARTER TO DECLASSIFY THE BOARD
AND PROVIDE FOR ANNUAL ELECTION OF DIRECTORS # OF VOTES CAST % OF VOTES CAST
------------------------------------------------------- ------------------ -----------------
For ........................................................................ 10,352,507.0000 97.7
Against .................................................................... 136,384.0000 1.3
Abstain .................................................................... 102,896.0000 1.0
---------------- -----
TOTAL ............................................................. 10,591,787.0000 100.0
================ =====
PROPOSAL 3: (VOTING BY ALL SHAREHOLDERS):
AMENDMENT TO THE FUND'S CHARTER PROVIDING THAT DIRECTORS SHALL BE
ELECTED BY A PLURALITY OF VOTES CAST AT A MEETING AT WHICH A QUORUM IS PRESENT # OF VOTES CAST % OF VOTES CAST
------------------------------------------------------------------------------ ----------------- -----------------
For ........................................................................ 6,129,067.0000 57.9
Against .................................................................... 164,014.0000 1.5
Abstain .................................................................... 82,464.0000 0.8
No Vote .................................................................... 4,216,242.0000 39.8
--------------- -----
TOTAL ............................................................. 10,591,787.0000 100.0
=============== =====
16
BOULDER GROWTH & INCOME FUND, INC.
MEETING OF SHAREHOLDERS -- VOTING RESULTS (UNAUDITED) (CONTINUED)
PROPOSAL 4: (VOTING BY ALL SHAREHOLDERS):
AN AMENDMENT TO THE CHARTER PROVIDING THAT THE SECRETARY OF THE FUND SHALL
CALL A SPECIAL STOCKHOLDERS MEETING UPON THE WRITTEN REQUEST OF THE HOLDERS
OF 25% OF OUTSTANDING SHARES ENTITLED TO VOTE AT THE MEETING # OF VOTES CAST % OF VOTES CAST
--------------------------------------------------------------------------- ----------------- -----------------
For ........................................................................ 6,085,323.0000 57.5
Against .................................................................... 212,927.0000 2.0
Abstain .................................................................... 77,295.0000 0.7
No Vote .................................................................... 4,216,242.0000 39.8
--------------- -----
TOTAL ............................................................. 10,591,787.0000 100.0
=============== =====
PROPOSAL 5: (VOTING BY ALL SHAREHOLDERS):
AN AMENDMENT TO THE CHARTER VESTING IN THE STOCKHOLDERS THE POWER TO AMEND
OR ADOPT BYLAWS BY THE AFFIRMATIVE VOTE OF A MAJORITY OF VOTES CAST AT A
MEETING AT WHICH A QUORUM IS PRESENT # OF VOTES CAST % OF VOTES CAST
-------------------------------------------------------------------------- ----------------- -----------------
For ........................................................................ 6,109,955.0000 57.7
Against .................................................................... 156,896.0000 1.5
Abstain .................................................................... 108,694.0000 1.0
No Vote .................................................................... 4,216,242.0000 39.8
--------------- -----
TOTAL ............................................................. 10,591,787.0000 100.0
=============== =====
PROPOSAL 6: (VOTING BY ALL SHAREHOLDERS):
AN AMENDMENT TO THE CHARTER PROHIBITING THE FUND FROM OPTING INTO ANY
PROVISION OF THE MARYLAND UNSOLICITED TAKEOVERS ACT # OF VOTES CAST % OF VOTES CAST
--------------------------------------------------------------------- ----------------- -----------------
For ........................................................................ 6,095,657.0000 57.6
Against .................................................................... 165,286.0000 1.5
Abstain .................................................................... 114,602.0000 1.1
No Vote .................................................................... 4,216,242.0000 39.8
--------------- -----
TOTAL ............................................................. 10,591,787.0000 100.0
=============== =====
PROPOSAL 7: (VOTING BY ALL SHAREHOLDERS):
AN AMENDMENT TO THE CHARTER REPEALING ARTICLE SEVENTH, SECTION 5 AND
REPLACING IT WITH A PROVISION PROVIDING THAT NO (A) BUSINESS COMBINATION
(E.G., MERGERS, CONSOLIDATION, SHARE EXCHANGES), (B) VOLUNTARY LIQUIDATION
OR DISSOLUTION, (C) STOCKHOLDER PROPOSAL REGARDING SPECIFIC INVESTMENT
DECISIONS, (D) PROPOSAL TO OPEN-END THE FUND, OR (E) SELF TENDER FOR
MORE THAN 25% OF THE FUND'S SHARES IN ANY TWELVE-MONTH PERIOD, MAY BE
EFFECTED WITHOUT THE AFFIRMATIVE VOTE OF THE HOLDERS OF AT LEAST
TWO-THIRDS OF OUTSTANDING SHARES ENTITLED TO BE CAST ON THE MATTER # OF VOTES CAST % OF VOTES CAST
-------------------------------------------------------------------------- ----------------- -----------------
For ........................................................................ 5,773,585.0000 54.5
Against .................................................................... 435,888.0000 4.1
Abstain .................................................................... 166,072.0000 1.6
No Vote .................................................................... 4,216,242.0000 39.8
--------------- -----
TOTAL ............................................................. 10,591,787.0000 100.0
=============== =====
17
BOULDER GROWTH & INCOME FUND, INC.
MEETING OF SHAREHOLDERS -- VOTING RESULTS (UNAUDITED) (CONTINUED)
PROPOSAL 8: (VOTING BY ALL SHAREHOLDERS):
AN AMENDMENT TO THE CHARTER TO ESTABLISH THE MAXIMUM NUMBER OF DIRECTORS AT
FIVE # OF VOTES CAST % OF VOTES CAST
--------------------------------------------------------------------------- ---------------- -----------------
For ........................................................................ 6,104,442.0000 57.6
Against .................................................................... 180,279.0000 1.7
Abstain .................................................................... 90,824.0000 0.9
No Vote .................................................................... 4,216,242.0000 39.8
--------------- -----
TOTAL ............................................................. 10,591,787.0000 100.0
=============== =====
PROPOSAL 9: (VOTING BY ALL SHAREHOLDERS):
AN AMENDMENT TO THE CHARTER PROVIDING THAT ONLY CERTAIN CORPORATE ACTIONS
SHALL BE APPROVED BY THE AFFIRMATIVE VOTE OF THE HOLDERS OF AT LEAST A
MAJORITY OF ALL THE VOTES ENTITLED TO BE CAST ON THE MATTER # OF VOTES CAST % OF VOTES CAST
------------------------------------------------------------------------- ---------------- -----------------
For ........................................................................ 6,082,574.0000 57.4
Against .................................................................... 182,238.0000 1.7
Abstain .................................................................... 110,733.0000 1.1
No Vote .................................................................... 4,216,242.0000 39.8
--------------- -----
TOTAL ............................................................. 10,591,787.0000 100.0
=============== =====
PROPOSAL 10: (VOTING BY ALL SHAREHOLDERS):
A PROPOSAL TO AMEND AND RESTATE THE CHARTER, THE IMPLEMENTATION OF WHICH IS
CONTINGENT ON THE APPROVAL OF PROPOSALS 2 THROUGH 9 # OF VOTES CAST % OF VOTES CAST
--------------------------------------------------------------------------- ----------------- -----------------
For ........................................................................ 6,040,644.0000 57.0
Against .................................................................... 192,553.0000 1.8
Abstain .................................................................... 142,348.0000 1.4
No Vote .................................................................... 4,216,242.0000 39.8
--------------- -----
TOTAL ............................................................. 10,591,787.0000 100.0
=============== =====
18
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[GRAPHIC OMITTED]
MOUNTAIN ART
BOULDER GROWTH & INCOME FUND, INC.
P.O. Box 43027
Providence, RI 02940-3027
BOULDER
GROWTH & INCOME
FUND, INC.
(NYSE: BIF)
----------------------------------
SEMI-ANNUAL REPORT
MAY 31, 2004
DIRECTORS
Brig. Gen (Ret.) Alfred G. Aldridge Jr.
Richard I. Barr
John S. Horejsi
Joel W. Looney
Stephen C. Miller
OFFICERS
Stephen C. Miller
President
Carl D. Johns
Vice President and Treasurer
Stephanie J. Kelley
Secretary
Nicole L. Murphey
Assistant Secretary
WWW.BOULDERFUNDS.NET
If you have questions regarding shares you held in a brokerage account contact
your broker, or, if you have physical possession of your shares in certificate
form, contact the Fund's Transfer Agent & Shareholder Servicing Agent -- PFPC,
Inc. at:
P.O. Box 43027
Providence, RI 02940-3027
1-800-331-1710
This report is sent to shareholders of Boulder Growth & Income Fund, Inc. for
their information. It is not a prospectus, circular or representation intended
for use in the purchase or sale of shares of the Fund or of any securities
mentioned in this report.
ITEM 2. CODE OF ETHICS.
Not applicable.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS
Not yet applicable.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which the shareholders
may recommend nominees to the registrant's board of directors, where those
changes were implemented after the registrant last provided disclosure in
response to the requirements of Item 7(d)(2)(ii)(G) of Schedule 14A (17 CFR
240.14a-101), or this Item.
ITEM 10. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive and principal financial officers,
or persons performing similar functions, 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") (17 CFR 270.30a-3(c))) are effective, as of a date within
90 days of the filing date of the report that includes the disclosure
required by this paragraph, based on their evaluation of these controls
and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR
270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities
Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or
240.15d-15(b)).
(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 (17
CFR 270.30a-3(d)) that occurred during the registrant's last fiscal
half-year (the registrant's second fiscal half-year in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial
reporting.
ITEM 11. EXHIBITS.
(a)(1) Not applicable.
(a)(2) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and
Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto.
(a)(3) Not applicable.
(b) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and
Section 906 of the Sarbanes-Oxley Act of 2002 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.
(registrant) BOULDER GROWTH & INCOME FUND, INC.
By (Signature and Title)* /S/ STEPHEN C. MILLER
-------------------------------------------------------
Stephen C. Miller, President
(principal executive officer)
Date JULY 14, 2004
----------------------------------------------------------------------------
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 (Signature and Title)* /S/ STEPHEN C. MILLER
-------------------------------------------------------
Stephen C. Miller, President
(principal executive officer)
Date JULY 14, 2004
----------------------------------------------------------------------------
By (Signature and Title)* /S/ CARL D. JOHNS
-------------------------------------------------------
Carl D. Johns, Vice President and Treasurer
(principal financial officer)
Date JULY 14, 2004
----------------------------------------------------------------------------
* Print the name and title of each signing officer under his or her signature.