SOURCE CAPITAL /DE/ — Regulatory Filings 2004

Nov 26, 2004

N-Q 1 a04-13839_1nq.htm N-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
FORM N-Q

*QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT INVESTMENT COMPANY*

| Investment
Company Act file number | |
| --- | --- |
| Source Capital, Inc. | |
| (Exact name of registrant as specified in charter) | |
| 11400 West Olympic Boulevard, Suite 1200,
Los Angeles, California | 90064 |
| (Address of principal executive offices) | (Zip code) |
| J. Richard Atwood, Treasurer, Source Capital, Inc., 11400 West Olympic Boulevard, Suite 1200, Los Angeles, California 90064 | |
| (Name and address of agent for service) | |
| Registrant's
telephone number, including area code: | (310) 473-0225 |
| Date of
fiscal year end: | December 31 |
| Date of
reporting period: | September
30, 2004 |

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ITEM 1. Schedule of Investments.

Source Capital, Inc.

Portfolio of Investments

September 30, 2004 (unaudited)

COMMON STOCKS	Shares or Principal Amount	Value
BUSINESS SERVICE SERVICES & SUPPLIES — 16.5%
Bio-Rad
Laboratories, Inc.*	190,000	$ 9,709,000
Black
Box Corporation	260,800	9,636,560
Charles
River Laboratories International, Inc.*	15,000	687,000
HNI
Corporation	321,400	12,721,012
Inveresk
Research Group, Inc.*	311,700	11,498,613
Manpower
Inc.	300,000	13,347,000
Office
Depot, Inc.*	900,000	13,527,000
ScanSource,
Inc.*	284,000	18,119,200
		$ 89,245,385
PRODUCER DURABLE GOODS — 15.9%
Checkpoint
Systems, Inc.*	68,462	$ 1,065,954
Cognex
Corporation	575,000	15,065,000
Crane
Co.	435,000	12,580,200
Graco
Inc.	514,500	17,235,750
IDEX
Corporation	511,500	17,370,540
Oshkosh
Truck Corporation	162,500	9,272,250
Zebra
Technologies Corporation (Class A)*	220,000	13,422,200
		$ 86,011,894

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| ENERGY — 11.8% — Cal
Dive International, Inc. | 725,000 | $ 25,824,500 |
| --- | --- | --- |
| Noble
Corporation | 460,000 | 20,677,000 |
| Tidewater
Inc. | 540,000 | 17,577,000 |
| | | $ 64,078,500 |
| HEALTH CARE — 10.4% | | |
| Health
Management Associates, Inc. | 505,000 | $ 10,317,150 |
| Invitrogen
Corporation | 95,000 | 5,224,050 |
| Landauer,
Inc. | 14,300 | 671,099 |
| Lincare
Holdings Inc. | 450,000 | 13,369,500 |
| Ocular
Sciences, Inc. | 150,000 | 7,195,500 |
| Renal
Care Group, Inc. | 600,000 | 19,338,000 |
| | | $ 56,115,299 |
| TECHNOLOGY — 10.3% | | |
| Advanced
Fibre Communications, Inc. | 710,000 | $ 11,289,000 |
| KEMET
Corporation | 200,000 | 1,618,000 |
| Plantronics,
Inc. | 380,000 | 16,431,200 |
| SanDisk
Corporation | 790,000 | 23,004,800 |
| TriQuint
Semiconductor, Inc. | 943,029 | 3,677,813 |
| | | $ 56,020,813 |
| RETAILING — 7.6% | | |
| Carmax,
Inc. | 750,006 | $ 16,162,629 |
| O’Reilly
Automotive, Inc. | 652,500 | 24,984,225 |
| | | $ 41,146,854 |
| FINANCIAL — 7.5% | | |
| Brown
& Brown, Inc. | 251,000 | $ 11,470,700 |
| Arthur
J. Gallagher & Co. | 275,000 | 9,110,750 |
| North
Fork Bancorporation, Inc. | 455,000 | 20,224,750 |
| | | $ 40,806,200 |
| ENTERTAINMENT — 4.7% | | |
| Carnival
Corporation | 536,600 | $ 25,375,814 |
| MATERIALS — 2.4% | | |
| Engelhard
Corporation | 465,000 | $ 13,182,750 |
| TRANSPORTATION — 0.5% | | |
| Heartland
Express, Inc. | 157,500 | $ 2,905,875 |
| TOTAL COMMON STOCKS — 87.6% (Cost $305,379,947) | | $ 474,889,384 |
| PREFERRED STOCKS | | |
| REAL ESTATE INVESTMENT TRUST | | |
| CBL
& Associates Properties, Inc. | 100,000 | $ 2,621,000 |
| Duke-Weeks
Realty Corp. (Series B) | 40,000 | 2,102,500 |
| Pennsylvania
Real Estate Investment Trust (Series A) | 59,000 | 3,510,500 |
| ProLogis
(Series G) | 120,000 | 2,986,800 |
| TOTAL PREFERRED STOCKS — 2.1% (Cost $10,179,446) | | $ 11,220,800 |
| CONVERTIBLE BONDS AND DEBENTURES | | |
| TECHNOLOGY — 0.7% | | |
| BEA
Systems, Inc. — 4% 2006 | $ 2,000,000 | $ 2,010,000 |
| LSI
Logic Corporation — 4% 2006 | 2,000,000 | 1,987,500 |
| | | $ 3,997,500 |
| PRODUCER DURABLE GOODS — 0.2% | | |
| Checkpoint
Systems, Inc. — 5.25% 2005 | $ 781,000 | $ 785,881 |
| TOTAL CONVERTIBLE BONDS AND DEBENTURES — 0.9% (Cost
$4,355,460) | | $ 4,783,381 |

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| NON-CONVERTIBLE BONDS AND DEBENTURES CORPORATE — 6.5% — Avaya
Inc. — 11.125% 2009 | $ 1,300,000 | $ 1,508,000 |
| --- | --- | --- |
| Central
Garden & Pet Company — 9.125% 2013 | 2,000,000 | 2,195,000 |
| Host
Marriott Corporation — 9.25% 2007 | 2,000,000 | 2,260,000 |
| Lear
Corporation — 7.96% 2005 | 2,000,000 | 2,115,000 |
| Manitowoc
Company, Inc., The — 10.5% 2012 | 2,000,000 | 2,250,000 |
| Metaldyne
Corporation — 11% 2012 | 2,000,000 | 1,640,000 |
| OM
Group, Inc. — 9.25% 2011 | 4,000,000 | 4,220,000 |
| Orbital
Sciences Corporation — 9% 2011 | 3,000,000 | 3,345,000 |
| PolyOne
Corporation — 10.625% 2010 | 950,000 | 1,036,688 |
| Realty
Income Corporation — 8.25% 2008 | 2,000,000 | 2,248,800 |
| SpectraSite,
Inc. — 8.25% 2010 | 2,000,000 | 2,150,000 |
| Unisys
Corporation | | |
| — 7.875% 2008 | 1,500,000 | 1,550,625 |
| — 8.125% 2006 | 2,000,000 | 2,137,500 |
| Vicar
Operating Inc. — 9.875% 2009 | 3,000,000 | 3,326,250 |
| Windmere
Durable Holdings Inc. — 10% 2008 | 3,000,000 | 3,022,500 |
| | | $ 35,005,363 |
| U.S. GOVERNMENT AND AGENCIES — 0.1% | | |
| Federal
Home Loan Mortgage Corporation | | |
| — 6.5% 2023 (Interest Only) | $ 107,261 | $ 5,967 |
| — 10.15% 2006 (REMIC) | 683 | 683 |
| Federal
National Mortgage Association | | |
| — 6% 2029 (Interest Only) | 2,041,552 | 415,966 |
| Government
National Mortgage Association (Mobile Home) | | |
| — 9.75% 2010 | 396,301 | 428,268 |
| | | $ 850,884 |
| TOTAL NON-CONVERTIBLE BONDS AND
DEBENTURES — 6.6% (Cost $34,378,463) | | $ 35,856,247 |
| TOTAL INVESTMENT SECURITIES — 97.2% (Cost $354,293,316) | | $ 526,749,812 |
| SHORT-TERM INVESTMENTS — 2.4% (Cost $12,907,056) | | |
| Short-term
Corporate Notes: | | |
| American General Finance Corporation — 1.84%
10/01/04 | $ 7,908,000 | $ 7,908,000 |
| Federal Home Loan Mortgage Corporation Discount
Note — 1.70% 10/05/04 | 5,000,000 | 4,999,056 |
| TOTAL SHORT-TERM INVESTMENTS | | $ 12,907,056 |
| TOTAL INVESTMENTS — 99.6% (Cost $367,200,372)(A) | | $ 539,656,868 |
| Other
assets and liabilities, net — 0.4% | | 2,129,704 |
| TOTAL NET ASSETS — 100% | | $ 541,786,572 |

| *Non-income
producing securities | |
| --- | --- |
| (A)
The cost stated also approximates the aggregate cost for Federal income tax
purposes. Net unrealized appreciation consists of: | |
| Gross unrealized appreciation: | $ 184,117,299 |
| Gross unrealized depreciation: | 11,660,803 |
| Net unrealized appreciation: | $ 172,456,496 |

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ITEM 2. CONTROLS AND PROCEDURES.

(a) The Principal Executive Officer and Principal Financial Officer of the registrant have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) are effective based on their evaluation of the disclosure controls and procedures as of a date within 90 days of the filing date of this report.

(a) There have been no significant changes in the registrant’s internal controls over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act) that occurred during the registrant’s last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal controls over financial reporting.

ITEM 3. EXHIBITS.

(a) Separate certification for the registrant’s principal executive officer and principal financial officer, as required by Rule 30a-2(a) under the Investment Company Act of 1940. 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.

SOURCE CAPITAL, INC.

By:
Eric S. Ende, President

Date: November 24, 2004

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.

SOURCE CAPITAL, INC.

By:
J. Richard Atwood, Treasurer

Date: November 24, 2004

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