SEQUOIA FUND, INC.

ANNUAL REPORT

December 31, 1999

 

 

 

 

 

 

 

SEQUOIA FUND, INC.

ILLUSTRATION OF AN ASSUMED INVESTMENT OF $ 10,000

With Income Dividends Reinvested and Capital Gains

Distributions Accepted in Shares

 

The table below covers the period from July 15, 1970 (the date Fund shares were first offered to the public) to December 31, 1999. This period was one of widely fluctuating common stock prices. The results shown should not be considered as a representation of the dividend income or capital gain or loss which may be realized from an investment made in the Fund today.

PERIOD ENDED:

Value of Initial

$10,000 Investment

Value of Cumulative Capital Contributions

Value of Cumulative Reinvested Dividends

Total Value of Shares

July 15, 1970

$10,000

$--

$--

$10,000

May 31, 1971

11,750

--

184

11,934

May 31, 1972

12,350

706

451

13,507

May 31, 1973

9,540

1,118

584

11,242

May 31, 1974

7,530

1,696

787

10,013

May 31, 1975

9,490

2,137

1,698

13,325

May 31, 1976

12,030

2,709

2,654

17,393

May 31, 1977

15,400

3,468

3,958

22,826

Dec. 31, 1977

18,420

4,617

5,020

28,057

Dec. 31, 1978

22,270

5,872

6,629

34,771

Dec. 31, 1979

24,300

6,481

8,180

38,961

Dec. 31, 1980

25,040

8,848

10,006

43,894

Dec. 31, 1981

27,170

13,140

13,019

53,329

Dec. 31, 1982

31,960

18,450

19,510

69,920

Dec. 31, 1983

37,110

24,919

26,986

89,015

Dec. 31, 1984

39,260

33,627

32,594

105,481

Dec. 31, 1985

44,010

49,611

41,354

134,975

Dec. 31, 1986

39,290

71,954

41,783

153,027

Dec. 31, 1987

38,430

76,911

49,020

164,361

Dec. 31, 1988

38,810

87,760

55,946

182,516

Dec. 31, 1989

46,860

112,979

73,614

233,453

Dec. 31, 1990

41,940

110,013

72,633

224,586

Dec. 31, 1991

53,310

160,835

100,281

314,426

Dec. 31, 1992

56,660

174,775

112,428

343,863

Dec. 31, 1993

54,840

213,397

112,682

380,919

Dec. 31, 1994

55,590

220,943

117,100

393,633

Dec. 31, 1995

78,130

311,266

167,129

556,525

Dec. 31, 1996

88,440

397,099

191,967

677,506

Dec. 31, 1997

125,630

570,917

273,653

970,200

Dec. 31, 1998

160,700

798,314

353,183

1,312,197

Dec. 31, 1999

127,270

680,866

286,989

1,095,125

The total amount of capital gains distributions accepted in shares was $328,919, the total amount of dividends reinvested was $91,708.

No adjustment has been made for any taxes payable by shareholders on capital gain distributions and dividends reinvested in shares.

 

To the Shareholders of Sequoia Fund, Inc.

Dear Shareholder:

Sequoia Fund's results for the fourth quarter and full year 1999 are shown below with comparable results for the leading market indexes:

1999

Sequoia

Fund

Dow Jones

Industrials

Standard &

Poor's 500

Fourth Quarter

+ 1.3%

+11.7%

+14.9%

Year

-16.5

27.3

21.0

 

As we stated in our third quarter report, 1999 has been a serious disappointment for Sequoia Fund shareholders, including ourselves. The market value of Sequoia shares declined 16.5% during the year. To date in 2000 as we write you, the momentum has continued and Sequoia is down an additional 9%. This means that Sequoia has retreated to a share value roughly equivalent to early 1998 when, after a three year run during which our stocks compounded at a 35% annual rate, we warned that Sequoia's performance was borrowing from the future. We didn't know how right we were.

In light of our recent results, we have had to take a good hard look at ourselves and our investment approach and ask, "Should we be doing something differently?"

Our longstanding approach to investing has been based on a few core principles. First, we try to own common stocks of high quality companies with good earnings growth prospects. We look for superior returns on invested capital, and we look for the returns to be sustainable well into the future. It's the last part of this requirement that is particularly tricky to assess.

Second, we try to buy these companies at prices we believe underestimate their real value. This criterion dramatically narrows the field of potential candidates, as great companies are usually already recognized by the market.

Third, when we find the first two elements together, we want to own a lot of the stock. And finally, we hope to hold these investments for many years as long as the fundamentals remain sound and earnings prospects remain favorable. We will generally hold an investment even if it faces some short-term challenges, or if its "sector" falls out of favor, or if it gets a bit ahead of itself. We will sell some or all of a position if we feel its valuation has reached levels which appear excessive relative to likely earnings prospects. These simple principles have served us well over the past 30 years, although we had a tendency to leave a fair amount of money on the table. As a result, in recent years we adopted a tolerance for holding stocks at higher valuation levels than in the past. This evolution contributed to our outsized results in 1997 and 1998, but also was a factor in our unusually poor results in 1999.

Between our important positions in Progressive Corporation and the Geico and General Re subsidiaries of Berkshire Hathaway, the Fund had a big investment in the auto insurance and general property/casualty reinsurance businesses going into 1999. The decline in market values of Progressive and Berkshire accounted for about 80% of the decline in the Fund's net asset value during the year. While we were well aware of cyclical profit pressures in auto insurance and had low expectations for near term reinsurance results, we underestimated the severity of the cycle and perhaps overestimated the ability of our companies' earnings to withstand the effects of the various industry pressures. However, we also believe that the market remains excessively fixated on Progressive's and Berkshire's next few quarters, ignoring both companies' superb track records and excellent long term opportunities.

A number of our shareholders have written us in frustration with our lack of direct technology investments. We are all mind-numbingly aware that technology stocks comprise the current & and virtually only -- area of market excitement today and have accounted for almost all the gains in the market indexes in 1999 and 2000 to date. Some shareholders have accused us of "smugness" in our staunch agnosticism in this area. Quite the contrary! Rather, we find it extremely daunting to analyze businesses characterized by rapid technological change with their resultant shorter periods of predictable competitive advantage. And generally these companies trade at very high valuations which implicitly assume that dramatic growth and very high profit levels will continue uninterrupted in almost flawless perpetuity, in sharp contrast to almost all economic history. That requires a sense of certainty that we simply cannot muster.

Investors abandon valuation considerations in investing from time to time. You might be interested to read the following commentary by Benjamin Graham in reviewing stock market behavior leading up to 1929: "The notion that the desirability of a common stock was entirely independent of its price seems incredibly absurd. Yet the new era theory led directly to this thesis..Instead of judging the market price by established standards of value, the new era based its standards of value upon the market price. Hence all upper limits disappeared, not only upon the price at which a stock could sell, but even upon the price at which it would deserve to sell..The results of such a doctrine could not fail to be tragic." (Emphasis ours.) These comments were written 66 years ago in Security Analysis, 1934 edition. Ironically enough in view of today's market conditions, the title of the chapter is "The New-Era Theory".

More recently, a highly respected figure in the investment community, Bob Kirby, caustically summarized much of what is going on currently in the stock market with two rules for investing in today's "new era": "Rule 1) Any stock that has tripled during the past 12 months is a serious purchase candidate; and Rule 2) Any stock that has been flat for the past month or two or - God forbid - has gone down, is immediately sold." Needless to say, our investment approach is not in sync with current conditions, but we will not abandon proven standards just to be with the crowd.

So where is Sequoia today? Our portfolio consists of a relatively small number of very fine, high growth companies. These companies have significant competitive advantages in their markets, high returns on capital, abundant reinvestment opportunities, management teams with talent and integrity and outstanding track records. Some of them are experiencing what we believe to be short term business difficulties, others are hitting on all cylinders.

We have never had any success in forecasting either Sequoia's or the stock market's short term performance. However, our sense of valuation has proven to be a good barometer over longer periods of time. We feel quite strongly that our combined portfolio holdings will generate compound annual earnings growth well into the double-digits as far out as we can see. We believe that the current prices of our holdings, in the aggregate, significantly undervalue these prospects. In 1998 we warned that our exceptional gains in recent years were borrowing from future performance. With our underperformance in 1999 and thus far in 2000, we believe we have more than repaid this debt. The combination of attractive current valuations and strong earnings prospects for our portfolio companies should produce very satisfactory results over the next five years.

Sincerely,

 

Carley Cunniff

Richard T. Cunniff

Robert D. Goldfarb

William J. Ruane

Executive Vice President

Vice Chairman

President

Chairman

 

February 17, 2000

  

SEQUOIA FUND, INC.

Schedule of Investments

December 31, 1999

 

 

COMMON STOCKS (78.49%)

 

     

Value

Shares

 

Cost

(Note 1)

  BANK HOLDING COMPANIES (14.72%)  

5,958,662

Fifth Third Bancorp

$ 89,279,910

$ 437,216,824

323,700

Mercantile Bankshares Corporation

3,339,925

10,338,169

1,145,900

National Commerce Bancorp

7,110,847

25,997,606

4,142,300

U. S. Bancorp

52,341,868

98,638,519

   

152,072,550

572,191,118

  DIVERSIFIED COMPANIES (29.11%)  

20,175

Berkshire Hathaway Inc. Class A*

160,993,354

1,131,817,500

  INSURANCE (7.15%)    

3,800,900

Progressive Corporation-Ohio+

129,150,484

277,940,812

  MANUFACTURING - MOTORCYCLES (7.87%)  

4,777,500

Harley Davidson, Inc.

64,205,363

306,058,594

  PERSONAL CREDIT (1.69%)    

1,765,000

Household International Inc.

22,208,717

65,746,250

  SERVICES (15.29%)    

12,632,900

Freddie Mac

52,356,710

594,535,856

  Miscellaneous Securities (2.66%)

77,319,946

103,416,169

  TOTAL COMMON STOCKS

$658,307,124

$3,051,706,299

 

 

 

SEQUOIA FUND, INC.

Schedule of Investments

December 31, 1999

(continued)

 

 

Principal

Amount

Cost

Value

(Note 1)

U.S. GOVERNMENT OBLIGATIONS (21.51%)    

$ 16,700,000

U.S. Treasury Bills due 2/10/00 through 2/17/00

$ 16,602,315

$16,602,315

259,000,000

U.S. Treasury Notes, 5 5/8% due 4/30/2000

259,563,663

259,000,000

152,000,000

U.S. Treasury Notes, 5 3/8% due 7/31/2000

152,555,707

151,620,000

236,000,000

U.S. Treasury Notes, 5 1/2% due 8/31/2001

235,386,594

233,381,875

176,000,000

U.S. Treasury Notes, 6 1/8% due 12/31/2001

175,917,613

175,642,500

  TOTAL U.S. GOVERNMENT OBLIGATIONS

840,025,892

836,246,690

  TOTAL INVESTMENTS (100%)++

$1,498,333,016

$3,887,952,989

 

++ The cost for federal income tax purposes is identical.

* Non-income producing.

+ Refer to Note 6.

 

SEQUOIA FUND, INC.

Statement of Assets and Liabilities

December 31, 1999

 

 

ASSETS:  
Investments in securities, at value (cost $1,498,333,016) (Note 1)

$3,887,952,989

Cash on deposit with custodian

151,513

Receivable for capital stock sold

745,819

Dividends and interest receivable

12,167,586

Other assets

42,354

Total assets

3,901,060,261

LIABILITIES:  
Payable for capital stock repurchased

756,260

Accrued investment advisory fee

3,316,830

Accrued other expenses

103,835

Total liabilities

4,176,925

Net assets applicable to 30,618,636 shares of capital stock outstanding (Note 4)

$3,896,883,336

Net asset value, offering price and redemption price per share

$127.27

 

The accompanying notes form an integral part of these Financial Statements.

 

SEQUOIA FUND, INC.

Statement of Operations

Year Ended December 31, 1999

 

INVESTMENT INCOME:  
Income:  
Dividends:  
Unaffiliated companies

20,010,750

Affiliated companies (Note 6)

1,020,643

Interest

49,835,874

Total income

70,867,267

Expenses:  
Investment advisory fee (Note 2)

45,280,173

Legal and auditing fees

80,263

Stockholder servicing agent fees

371,584

Custodian fees

80,000

Directors fees and expenses (Note 5)

187,184

Other

159,996

Total expenses

46,159,200

Less expenses reimbursed by Investment Adviser (Note 2)

729,000

Net expenses

45,430,200

Net investment income

25,437,067

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:  
Realized gain on investments:  

Unaffiliated companies

90,205,636

Affiliated companies (Note 6)

56,067,720

Net realized gain on investments

146,273,356

Net decrease in unrealized appreciation on:  

Investments

(969,232,109)

Net realized and unrealized gain (loss) on investments

(822,958,753)

Decrease in net assets from operations

$ (797,521,686)

 

The accompanying notes form an integral part of these Financial Statements.

 

SEQUOIA FUND, INC.

Statements of Changes in Net Assets

 

 

  Year Ended December 31,
 

1999

1998

INCREASE (DECREASE) IN NET ASSETS:    
From operations:    

Net investment income

$ 25,437,067

$ 11,736,732

Net realized gains

146,273,356

431,381,943

Net (decrease)/increase in unrealized appreciation

(969,232,109)

859,089,190

Net (decrease)/increase in net assets from operations

(797,521,686)

1,302,207,865

Distributions to shareholders from:    

Net investment income

(26,006,104)

(10,988,302)

Net realized gains

(204,435,454)

(238,181,010)

Capital share transactions (Note 4)

(77,044,856)

276,288,024

Total (decrease)/increase

(1,105,008,100)

1,329,326,577

NET ASSETS:    

Beginning of year

5,001,891,436

3,672,564,859

End of year

$3,896,883,336

$5,001,891,436

NET ASSETS CONSIST OF:    

Capital (par value and paid in surplus)

$1,506,881,082

$1,483,849,808

Undistributed net investment income

179,393

748,430

Undistributed net realized gains

202,888

158,441,116

Unrealized appreciation

2,389,619,973

3,358,852,082

Total Net Assets

$3,896,883,336

$5,001,891,436

 

The accompanying notes form an integral part of these Financial Statements.

 

 

SEQUOIA FUND, INC.

NOTES TO FINANCIAL STATEMENTS

 

NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:

Sequoia Fund Inc. is registered under the Investment Company Act of 1940, as amended, as a non-diversified, open-end management company. The investment objective of the Fund is growth of capital from investments primarily in common stocks and securities convertible into or exchangeable for common stock. The following is a summary of significant accounting policies, consistently followed by the Fund in the preparation of its financial statements.

    1. Valuation of investments: Investments are carried at market value or at fair value as determined by the Board of Directors. Securities traded on a national securities exchange are valued at the last reported sales price on the principal exchange on which the security is listed on the last business day of the period; securities traded in the over-the-counter market are valued at the last reported sales price on the NASDAQ National Market System on the last business day of the period; listed securities and securities traded in the over-the-counter market for which no sale was reported on that date are valued at the mean between the last reported bid and asked prices; U.S. Treasury Bills with remaining maturities of 60 days or less are valued at their amortized cost. U.S. Treasury Bills that when purchased have a remaining maturity in excess of sixty days are stated at their discounted value based upon the mean between the bid and asked discount rates until the sixtieth day prior to maturity, at which point they are valued at amortized cost.
    2. Accounting for investments: Investment transactions are accounted for on the trade date and dividend income is recorded on the ex-dividend date. The net realized gain or loss on security transactions is determined for accounting and tax purposes on the specific identification basis.
    3. Federal income taxes: It is the Fund's policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income to its stockholders. Therefore, no federal income tax provision is required.
    4. Use of Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates.
    5. General: Dividends and distributions are recorded by the Fund on the ex-dividend date. Interest income is accrued as earned.

 

NOTE 2--INVESTMENT ADVISORY CONTRACTS AND PAYMENTS TO INTERESTED PERSONS:

The Fund retains Ruane, Cunniff & Co., Inc. as its investment adviser. Ruane, Cunniff & Co., Inc. (Investment Adviser) provides the Fund with investment advice, administrative services and facilities.

Under the terms of the Advisory Agreement, the Investment Adviser receives a management fee equal to 1% per annum of the Fund's average daily net asset values. This percentage will not increase or decrease in relation to increases or decreases in the net asset value of the Fund. Under the Advisory Agreement, the Investment Adviser is obligated to reimburse the Fund for the amount, if any, by which the operating expenses of the Fund (including the management fee) in any year exceed the sum of 1-1/2% of the average daily net asset values of the Fund during such year up to a maximum of $30,000,000, plus 1% of the average daily net asset values in excess of $30,000,000. The expenses incurred by the Fund exceeded the percentage limitation during the year ended December 31, 1999 and the Investment Adviser reimbursed the Fund $729,000. For the year ended December 31, 1999, there were no amounts accrued to interested persons, including officers and directors, other than advisory fees of $45,280,173 and brokerage commissions of $131,970 to Ruane, Cunniff & Co., Inc. Certain officers of the Fund are also officers of the Investment Adviser and the Fund's distributor. Ruane, Cunniff & Co., Inc., the Fund's distributor, received no compensation from the Fund on the sale of the Fund's capital shares during the year ended December 31, 1999.

NOTE 3--PORTFOLIO TRANSACTIONS:

The aggregate cost of purchases and the proceeds from the sales of securities, excluding U.S. government obligations, for the year ended December 31, 1999 were $79,494,572 and $188,079,320,respectively. Included in proceeds of sales is $118,049,125 representing the value of securities disposed of in payment of redemptions in-kind resulting in realized gains of $100,076,130. As a result of the redemptions in-kind net realized gains differ for financial statement and tax purposes. These realized gains have been reclassified from undistributed realized gains to paid in surplus in the accompanying financial statements.

At December 31, 1999 the aggregate gross unrealized appreciation and depreciation of securities were $2,393,399,175 and $3,779,202, respectively.

NOTE 4--CAPITAL STOCK:

At December 31, 1999 there were 100,000,000 shares of $.10 par value capital stock authorized. Transactions in capital stock were as follows:

 

1999

1998

 

Shares

Amount

Shares

Amount

Shares sold

1,202,565

$ 176,388,982

2,164,908

$ 319,175,918

Shares issued to stockholders on reinvestment of:    

Net investment income

145,003

18,304,561

54,399

7,959,038

Net realized gain on investments

1,296,655

184,338,802

1,470,593

215,201,334

 

2,644,223

379,032,345

3,689,900

542,336,290

Shares repurchased

3,151,477

456,077,201

1,796,644

266,048,266

Net (Decrease)/Increase

(507,254)

$ (77,044,856)

1,893,256

$ 276,288,024

 

 NOTE 5--DIRECTORS FEES AND EXPENSES:

Directors who are not deemed "interested persons" receive fees of $6,000 per quarter and $2,500 for each meeting attended, and are reimbursed for travel and other out-of-pocket disbursements incurred in connection with attending directors meetings. The total of such fees and expenses paid by the Fund to these directors for the year ended December 31, 1999 was $187,184.

NOTE 6--AFFILIATED COMPANIES:

Investment in portfolio companies 5% or more of whose outstanding voting securities are held by the Fund are defined in the Investment Company Act of 1940 as "affiliated companies." The total value and cost of investments in affiliates at December 31, 1999 aggregated $277,940,812 and $129,150,484, respectively. The summary of transactions for each affiliate during the period of their affiliation for the year ended December 31, 1999 is provided below:

 

Purchases

Sales

Realized

Dividend

Affiliate

Shares

Cost

Shares

Cost

Gain

Income

Progressive Corp - Ohio

--

--

551,600

$19,431,378

$56,067,720

$1,020,643

 

NOTE 7--FINANCIAL HIGHLIGHTS:

 

Year Ended December 31,

 

1999

1998

1997

1996

1995

           
Per Share Operating Performance (for a share outstanding throughout each year)          
Net asset value, beginning of year

$160.70

$125.63

$88.44

$78.13

$55.59

Income from investment operations:          
Net investment income

0.84

0.39

0.08

0.38

0.31

Net realized and unrealized gains (losses) on investments

(26.83)

43.07

38.10

16.41

22.62

Total from investment operations

(25.99)

43.46

38.18

16.79

22.93

Less distributions:          
Dividends from net investment income

(0.85)

(0.37)

(0.08)

(0.38)

(0.31)

Distributions from net realized gains

(6.59)

(8.02)

(0.91)

(6.10)

(0.08)

Total distributions

(7.44)

(8.39)

(0.99)

(6.48)

(0.39)

Net asset value, end of year

$127.27

$160.70

$125.63

$88.44

$78.13

Total Return

-16.5%

35.3%

43.2%

21.7%

41.4%

Ratios/Supplemental data          
Net assets, end of year (in millions)

$3,896.9

$5,001.9

$3,672.6

$2,581.0

$2,185.5

Ratio to average net assets:          

Expenses

1.0%

1.0%

1.0%

1.0%

1.0%

Net investment income

0.6%

0.3%

0.1%

0.4%

0.5%

Portfolio turnover rate

12%

21%

8%

23%

15%

 

 

Report of Independent Accountants

 

To the Board of Directors and Shareholders of

Sequoia Fund, Inc.

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Sequoia Fund, Inc. (the "Fund") at December 31, 1999, and the results of its operations, the changes in its net assets and the financial highlights for the year then ended, in conformity with accounting principles generally accepted in the United States. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management; our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these financial statements in accordance with auditing standards generally accepted in the United States, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit, which included confirmation of securities at December 31, 1999 by correspondence with the custodian, provides a reasonable basis for the opinion expressed above. The financial statements of the Fund for the year ended December 31, 1998, including the financial highlights for each of the four years in the period then ended, were audited by other independent accountants whose report dated January 15, 1999 expressed an unqualified opinion on those financial statements.

PricewaterhouseCoopers LLP

New York, New York

January 14, 2000

 

 

CHANGE IN INDEPENDENT ACCOUNTANTS

 

On August 13, 1999, McGladrey & Pullen, LLP ("McGladrey") resigned as independent accountants of the Fund pursuant to an agreement by PricewaterhouseCoopers LLP ("PwC") to acquire McGladrey's investment company practice. The McGladrey partners and professionals serving the Fund at the time of the acquisition joined PwC.

The reports of McGladrey on the financial statements of the Fund during the past two fiscal years contained no adverse opinion or disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope or accounting principles.

In connection with its audits for the two most recent fiscal years and through August 13, 1999, there were no disagreements with McGladrey on any matter of accounting principle or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of McGladrey, would have caused it to make reference to the subject matter of disagreement in connection with its report.

On September 13, 1999 the Fund, with the approval of its Board of Directors and its Audit Committee, engaged PwC as its independent accountants.

 

SEQUOIA FUND, INC.

767 Fifth Avenue, Suite 4701

New York, New York 10153-4798

Website:www.sequoiafund.com

  

DIRECTORS

William J. Ruane
Richard T. Cunniff
Robert D. Goldfarb
Carol L. Cunniff
John M. Harding
Roger Lowenstein
Francis P. Matthews
C. William Neuhauser
Robert L. Swiggett

 

OFFICERS

William J. Ruane Chairman of the Board
Richard T. Cunniff Vice Chairman
Robert D. Goldfarb President
Carol L. Cunniff Executive Vice President
Joseph Quinones, Jr. Vice President, Secretary & Treasurer

 

INVESTMENT ADVISER & DISTRIBUTOR

Ruane, Cunniff & Co., Inc.

767 Fifth Avenue, Suite 4701

New York, New York 10153-4798

 

CUSTODIAN

The Bank of New York

MF Custody Administration Department

100 Church Street, 10th Floor

New York, New York 10286

 

REGISTRAR AND SHAREHOLDER

SERVICING AGENT

DST Systems, Inc.

P.O. Box 219477

Kansas City, Missouri 64121

 

LEGAL COUNSEL

Seward & Kissel

One Battery Park Plaza

New York, New York 10004

 

This report has been prepared for the information of shareholders of Sequoia Fund, Inc.