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
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BOULDER GROWTH & INCOME FUND, INC.
--------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
Fund Administrative Services
1680 38th Street, Suite 800
BOULDER, CO 80301
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(Address of principal executive offices) (Zip code)
Fund Administrative Services
1680 38th Street, Suite 800
BOULDER, CO 80301
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(Name and address of agent for service)
registrant's telephone number, including area code: 303-444-5483
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Date of fiscal year end: NOVEMBER 30, 2003
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Date of reporting period: MAY 31, 2003
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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.
BOULDER GROWTH & INCOME FUND, INC.
Semi-Annual Report
May 31, 2003
Dear Shareholder:
The Boulder Growth & Income Fund's net asset value ("NAV") on 5/31/03 was $5.68
per share. This is down $.91 from the NAV on 11/30/02, the end of the last
fiscal year. While this is a decline of 12.6 % (including the $.065 dividend
paid in March), it's not a yardstick to measure our performance. You'll recall
the Fund had a one-for-one rights offering in December 2002 when the Fund issued
one new share for each existing share at a price of $4.34 per share. This was
$2.12 per share lower than the NAV on that date, so the Fund's NAV was diluted
by approximately $1.07 per share. Of course even if you participated in the
offering, you incurred the $1.07 per share dilution, but you were able to buy
the new shares at a $2.12 discount to NAV. If you look solely at the performance
of the Fund's assets without taking into account the dilution that occurred, the
Fund's assets were up about 9% for the 6 months ending 5/31/03. This beat the
S&P 500 Index during the same period which had a return of 3.8%.
Picking stocks for the Fund that appreciated by 9% for the 6 months ending 5/31
is a good result. The stocks in the Fund appreciated in value more than the
stocks that make up the S&P 500 Index. But it was a roller coaster ride. At the
end of December last year, immediately after issuing the new shares in the
rights offering, the NAV was diluted from $6.46 per share down to about $5.39
per share. As described above, that's not portfolio performance. That's simple
mathematics of issuing new shares below NAV. Exhibit 2 shows that the NAV
suffered a 25% loss in the first quarter. Approximately 16.6% is explained by
the dilution of the NAV. The remaining part of the loss, about 8.4%, was the
decline in value of the assets in the Fund. However, by the end of the quarter
ending 5/31/03, the NAV was up to $5.68, a return on NAV of 16.6%. See Exhibit 2
for the Fund's quarterly returns over the last year vs. the S&P 500 Index. These
returns include the affect of the dilution from the rights offering.
The total assets in the Fund increased by just over $24 million from the
proceeds of the rights offering in December, bringing total net assets up to
about $61 million. In April, we leveraged the Fund by borrowing $20 million.
That brought total assets up to about $80 million, but left shareholder's equity
at $60 million. We used the proceeds to increase our holdings in Berkshire
Hathaway by purchasing 151 more `A' shares at an average price of $71,577.
Berkshire is currently at $74,900 per share, so we've done well. Berkshire
Hathaway stock did get as low as $62,000 in February, but we weren't buyers
then. We felt there was too much uncertainty with the war in Iraq, and didn't
want to take unnecessary risks. Several other new additions to the Fund during
the period were Sara Lee, H&R Block and Fidelity National Financial.
Most of the new investments in the Fund were in REITs (Real Estate Investment
Trusts). We bought about $17.5 million of various REITs in the last 6 months. A
complete listing of all the Fund's holdings can be found in the "Portfolio of
Investments" section of this report. REITs now make up 26.7% of the Fund's total
assets (including leverage). We bumped up against the 25% limit, but
shareholders approved a change to the Fund's fundamental investment policy in
April, permitting a concentration in REITs; which simply means we will keep more
than 25% of the Fund's assets in REITs all the time.
We still have cash available to invest from the proceeds from the leverage, and
we are finding some places to put it to work. But we're taking our time, trying
to tread carefully in a volatile market. The very last thing we want to do is to
put our money into a company and later have it "blow up" on us because of
corporate malfeasance or an accounting scandal.
Shareholders also approved a change to the Fund's diversified status making it
non-diversified. This means the Fund can have more concentrated positions of 5%
or greater than we could have under the diversified banner. Right now, Berkshire
Hathaway is our only position greater than 5%-- it's about 25% of total assets.
The overall market had a terrible first quarter in 2003 and has had a very good
2nd quarter--so far. The volatility of the market continues to be very high. The
S&P Index was about 930 on 11/30/02. It dropped all
the way down to about 800 by mid-March. That's a drop of 14%. Then from
mid-March to the end of May, it climbed back from 800 to 960. That's a gain of
20%. That's volatility!! Do we care about this market volatility? Yes and No.
Yes, we care because the volatility in the overall market means there is
volatility in the individual stocks that make up these indices. And there are a
handful of these individual stocks that we care about. If the volatility causes
the price of a good company to go down in sympathy with the rest of the market,
and it's a company that we like, we will take that opportunity and be a buyer.
On the flip side, no, we don't care. If the volatility causes a market rise, and
happens to take one of the companies we own to a level that is higher that we
bought it, we'll likely say, "so what." Unless the market takes the price of one
of our stocks to a level that is so ridiculously high that it bears no
resemblance to the intrinsic value, we will generally hold onto our investments
over a long period of time, riding the market up and down. We'll never make any
real money flipping hamburgers or stocks, so we won't.
Within BIF's portfolio, some of the better performers (having an impact) during
the 6 months ending 5/31/03 were USG Corporation up 49%, Providian Financial up
48%, and Alliant Energy up 23%. On the downside, some of the under-performers
were Northwestern, Safeway and Schering-Plough down 67%, 21% and 19%
respectively. REITs, which make up over 25% of the Fund's assets, were the
strongest performing sector in the portfolio. On a principal basis, not
including dividends, REITs were up about 7% in the period. We're down to only a
few remaining bonds left over from when we started as advisors to the Fund in
January 2002. The handful of bonds that we did hang onto performed well during
the period, rebounding from lows reached last year. We will eventually sell all
the remaining bonds that we inherited.
INTEREST RATES
Interest rates are at historical lows. The 10-year US Treasury Note is currently
yielding 3.36%, and a 3 year is yielding 1.54%. Anything under one year is below
1%. We haven't seen rates this low since the administration of Dwight D.
Eisenhower back in 1958. Now this may all change. No doubt that it will. But
nobody knows when, or how quickly, or even which direction. Capital has become
cheap, and the demand for money, which drives interest rates, has dwindled. When
the market declined in 2000, 2001 and 2002, people (including pension fund
managers and corporate treasurers) figured out that earning 2 or 3% on their
money is far better than losing 30 or 40% in the market. But as history tells
us, their memories will fade.
For many corporations, these low interest rates are providing a very good
financing source. Done properly, this financing rewards shareholders of those
corporations over a long period.
BIF shareholders are getting great benefits from these low rates through the
leverage that was issued. The recent cost of this line of credit was just over
2%. We have to pay a little bit higher rate than the US Government gets on their
short term T-Bills, but not by much.
Our website at www.boulderfunds.net is an excellent source for information on
the Fund. If you've lost your annual report it's there on the site. You will
also see on the website information about the Boulder Growth & Income's sister
Fund - the Boulder Total Return Fund.
/S/ SIGNATURE
Stewart R. Horejsi
June 19, 2003
--------------
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.
2
BOULDER GROWTH & INCOME FUND, INC.
EXHIBIT 1
(UNAUDITED)
NET ASSET VALUE AND MARKET PERFORMANCE FOR A COMMON SHARE FOR THE 6 MONTHS
ENDING 5/31/03
NAV MARKET
---- ------
November 30, 2002 ............................ $ 6.59 $ 5.22
May 31, 2003 ................................. $ 5.68 $ 4.85
------- -------
Change .................................... $ (0.91) $ (0.37)
Dividends Paid ............................... $ 0.065 $ 0.065
------- -------
Net Decrease in Value ........................ $ (0.85) $ (0.31)
Net Decrease % (No Dividend Reinvestment) .... -12.8% -5.8%
EXHIBIT 2
(UNAUDITED)
BIF TOTAL RETURNS FOR QTRS AND SIX MONTHS ENDING 5/31/03 VS. S&P 500
DIVIDENDS REINVESTED ON DIVIDEND PAY DATE
BIF BIF
NAV MARKET S&P 500
------- ------- --------
Quarter Ending 5/31/03 ................................... 16.6% 15.0% 15.1%
Quarter Ending 2/28/03* .................................. -25.0% -18.0% -9.7%
Quarter Ending 11/30/02 .................................. -4.1% -11.7% 2.7%
Quarter Ending 8/31/02 ................................... -12.6% -19.4% -13.8%
Trailing 12 Months Ending 5/31/03 ........................ -26.7% -32.9% -8.1%
-----------
* 1:1 Rights Offering. Dilution caused 16.6% decline in NAV
EXHIBIT 3
(UNAUDITED)
CHANGE IN PRINCIPAL VALUE OF ASSET CLASSES 11/30/2002 TO 05/31/2003
COMMON STOCK INVESTMENTS
--------------------------
BONDS/
FORIEGN STOCK &
REITS INDUSTRIALS PREFERRED STOCK TOTAL
----- ----------- --------------- -----
Beginning Market Value............. 11/30/02 $6,971,293 $27,378,690 $1,920,620 $36,270,603
---------- ----------- ---------- -----------
Cost of Purchases.................. 12/1/02 - 05/31/03 17,493,998 14,536,036 -- 32,030,034
Proceeds from Sales................ 12/1/02 - 05/31/03 4,238,591 327,096 1,394,219 5,959,906
---------- ----------- ---------- -----------
Net Purchases/(Sales).............. 13,255,407 14,208,940 (1,394,219) $26,070,128
Beginning Market Value Plus
Net Purchases/(Sales)........... 20,226,700 41,587,630 526,401 62,340,731
Net Appreciation .................. 2,262,026 573,635 285,495 3,121,156
---------- ----------- ---------- -----------
Ending Market Value................ 5/31/03 22,488,726 42,161,265 811,896 $65,461,887
Number of Issues Held.............. 5/31/03 21 16 15
Cash and Other Assets and
Liabilities..................... $(1,098,674)
-----------
Total Net Assets................... $64,363,213
===========
3
BOULDER GROWTH & INCOME FUND, INC. PORTFOLIO OF INVESTMENTS
MAY 31, 2003 (UNAUDITED)
--------------------------------------------------------------------------------
SHARES VALUE
--------- ----------
DOMESTIC COMMON STOCKS - 100.4%
BUILDING MATERIALS - 5.4% USG Corporation+o .................................... 300,000 $ 3,492,000
------------
DIVERSIFIED - 32.5% Berkshire Hathaway Inc., Class A+o ................... 295 20,945,000
------------
FINANCIAL SERVICES - 6.8% H&R Block, Inc. ...................................... 45,000 1,842,300
MGIC Investment Corporationo ......................... 25,000 1,350,500
Providian Financial Corporation+o .................... 130,000 1,175,200
------------
TOTAL FINANCIAL SERVICES 4,368,000
------------
FOOD-MISC/DIVERSIFIED - 1.7% Sara Lee Corporation ................................. 60,000 1,093,200
------------
INSURANCE
(PROPERTY-CASUALTY) - 1.7% Fidelity National Financial, Inc. .................... 35,000 1,087,450
------------
MANUFACTURING - 0.0%** Polymer Group, Inc. Class C+ ......................... 349 1,396
------------
MEDICAL-DRUG - 9.2% Bristol-Meyers Squibb Companyo ....................... 82,000 2,099,200
Merck & Company, Inc.o ............................... 40,000 2,223,200
Schering-Plough Corporationo ......................... 86,000 1,586,700
------------
TOTAL MEDICAL-DRUG/DIVERSIFIED 5,909,100
------------
REITS - 34.9% Archstone-Smith Realty Trust ......................... 70,000 1,663,200
Avalon Bay Communities Inc. .......................... 23,000 964,390
Boston Properties, Inc. .............................. 6,100 255,712
Chelsea Property Group ............................... 18,000 748,080
Developers Diversified Realty Corporationo ........... 88,060 2,485,934
Equity Residential Properties Trust .................. 40,000 1,059,200
First Industrial Realty Trust Inc. ................... 26,000 783,640
Health Care Property Investors Inc. .................. 41,000 1,607,610
Healthcare Realty Trust Inc. ......................... 33,000 958,650
Hospitality Property Trust ........................... 34,000 1,074,060
HRPT Properties Trusto ............................... 260,000 2,467,400
Liberty Property Trust ............................... 19,000 632,130
Mack-Cali Realty Corporation ......................... 25,000 859,250
Manufactured Home Communities, Inc. .................. 30,000 1,005,300
Post Properties, Inc.o ............................... 71,000 1,900,670
Public Storage, Inc. ................................. 15,000 512,550
Regency Centers Corporation .......................... 30,000 1,019,400
Simon Property Group Inc. ............................ 13,000 489,060
Thornburg Mortgage, Inc. ............................. 15,100 360,890
Trizec Properties, Inc. .............................. 100,000 1,093,000
Vornado Realty Trust ................................. 13,000 548,600
------------
TOTAL REITS 22,488,726
------------
RETAIL-SUPERMARKETS - 2.0% Safeway Inc.+o ....................................... 68,000 1,281,120
------------
UTILITY - 6.2% Alliant Energy Corporationo .......................... 83,800 1,674,324
Aquila Inc.+ ......................................... 111,900 309,963
Northwestern Corporationo ............................ 202,400 542,432
TXU Corporationo ..................................... 72,000 1,457,280
------------
TOTAL UTILITY 3,983,999
------------
TOTAL DOMESTIC COMMON STOCKS
(Cost $65,498,089) ....................................................................... 64,649,991
------------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
4
BOULDER GROWTH & INCOME FUND, INC. PORTFOLIO OF INVESTMENTS
MAY 31, 2003 (UNAUDITED)
--------------------------------------------------------------------------------
SHARES VALUE
--------- ----------
PREFERRED STOCKS AND SECURITIES - 0.0%**
(Cost $349,125)
CABLE TELEVISION - 0.0%** Adelpia Communications Corporation+ .................. 3,500 $ 1,750
------------
PAR
-------
CORPORATE BONDS - 1.0%
AIRLINES - 0.1% American Airlines Inc., Pass-through Certificates, 7.80%
due 10/01/06 ....................................... $ 120,000 55,421
Atlas Air Inc., Sr. Notes, (in default), 9.25%
due 04/15/08 ....................................... 100,000 22,500
------------
TOTAL AIRLINES 77,921
------------
CABLE TELEVISION - 0.1% Pegasus Communications Corporation, Sr. Notes,
9.75% due 12/01/06 ................................. 90,000 76,050
------------
ELECTRONICS (DEFENSE) - 0.2% Condor Systems Inc., Series B, Company Guarantee,
(in default), 11.875% due 05/01/09 ................. 400,000 90,000
-----------
MACHINERY-CONSTRUCTION/
MINING - 0.1% National Equipment Services Inc., Series B, Sr.
Sub. Notes, 10.00% due 11/30/04 .................... 50,000 9,750
National Equipment Services Inc., Seies D,
Company Guarantee, 10.00% due 11/30/04 ............. 80,000 15,600
------------
TOTAL MACHINERY-CONSTRUCTION/MINING 25,350
------------
RETAIL-MISCELLANEOUS - 0.0%** MTS, Inc., Sr. Sub. Notes, (in default),
9.375% due 05/01/05 ................................ 100,000 19,625
------------
TELECOMMUNICATIONS - 0.1% American Cellular Corporation, 9.50% due 10/15/09 .... 200,000 76,000
------------
UTILITY-ELECTRIC
POWER - 0.4% Calpine Canada Energy Finance, 8.50% due 05/01/08 .... 200,000 140,000
Calpine Corporation, Sr. Notes, 8.75% due 07/15/07 ... 150,000 105,750
------------
TOTAL UTILITY-ELECTRIC POWER 245,750
------------
WEB HOSTING/
DESIGN - 0.0%** PSInet Inc., Sr. Notes, (in default), 11.00% due
08/01/09 ........................................... 10,000 700
------------
TOTAL CORPORATE BONDS
(Cost $1,325,236) ...................................................................... 611,396
------------
FOREIGN BONDS - 0.3%
CABLE TELEVISION - 0.1% Callahan Nordrhein-Westfalen GMBH, Sr. Notes,
(in default), 14.00% due 07/15/10 .................. 350,000 17,500
United Pan-Europe Communications N.V., Sr.
Notes, (in default), 11.25% due 02/01/10 ++ ........ 350,000 73,500
------------
TOTAL CABLE TELEVISION 91,000
------------
UTILITY - 0.2% AmeriGas Partners Apu, Series D, Sr. Notes, 10.00%
due 04/15/06 ......................................... 100,000 107,750
------------
TOTAL FOREIGN BONDS
(Cost $766,248) ...................................................................... 198,750
------------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
5
BOULDER GROWTH & INCOME FUND, INC. PORTFOLIO OF INVESTMENTS
MAY 31, 2003 (UNAUDITED)
--------------------------------------------------------------------------------
PAR VALUE
--------- ----------
U.S. TREASURY BILLS - 7.8%
(Cost $4,996,024)
1.145% due 06/26/03 +++ .............................. $ 5,000,000 $ 4,996,024
------------
REPURCHASE AGREEMENTS - 7.8%
(Cost $5,032,000)
Agreement with PNC Capital Markets, 1.20% dated
05/30/03, to be repurchased at $ 5,032,503 on
06/02/03, collateralized by $ 4,930,000 U.S. Treasury
Note, 2.25% due 07/31/04(Value $ 5,034,763) .......... 5,032,000 5,032,000
------------
TOTAL INVESTMENTS (COST $77,966,722) - 117.3% ............................................... 75,489,911
OTHER ASSETS AND LIABILITIES - (17.3%) ...................................................... (11,126,698)
------------
NET ASSETS - 100.0% ......................................................................... $ 64,363,213
============
-----------
+ Non-income producing security.
++ Security exempt from registration under Rule 144A of the Securities Act of 1993.
+++ Annualized yield at date of purchase.
** Amount represents less than 0.1% of net assets.
o At May 31, 2003, 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 $41,840,960.
The information in the table below is unaudited.
FINANCIAL DATA
PER SHARE OF
COMMON STOCK
-------------
NYSE
NAV CLOSING PRICE
------- -------------
12/31/02 .......................... $5.39 $4.47
1/31/03 .......................... 5.24 4.43
2/28/03 .......................... 4.94 4.28
3/31/03 .......................... 4.94 4.50
4/30/03 .......................... 5.31 4.65
5/31/03 .......................... 5.68 4.85
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
6
BOULDER GROWTH & INCOME FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
--------------------------------------------------------------------------------
MAY 31, 2003 (UNAUDITED)
ASSETS:
Investments, at value (Cost $77,966,722) (Note 1)
See accompanying schedule ...................................................................... $ 75,489,911
Cash ............................................................................................. 1,286
Receivable for investment securities sold ........................................................ 10,298,174
Dividends and interest receivable ................................................................ 83,069
Broker commission due from Advisor ............................................................... 7,923
Prepaid expenses ................................................................................. 76,231
Other assets ..................................................................................... 15
----------------
TOTAL ASSETS ............................................................................... 85,956,609
LIABILITIES:
Loan payable to bank (Note 9) .................................................. $ 20,000,000
Payable for securities purchased ............................................... 1,211,460
Deferred compensation-director (Note 10) ....................................... 132,437
Investment co-advisory fees payable (Note 2) ................................... 72,920
Interest due on loan payable to bank (Note 9) .................................. 39,933
Legal and audit fees payable ................................................... 28,225
Administration fee payable (Note 2) ............................................ 21,282
Accrued expenses and other payables ............................................ 87,139
---------------
TOTAL LIABILITIES .......................................................................... 21,593,396
----------------
NET ASSETS .......................................................................................... $ 64,363,213
================
NET ASSETS consist of:
Distribution in excess of net investment income earned to date ................................... $ (108,468)
Accumulated net realized loss on investments sold ................................................ (15,714,806)
Unrealized depreciation of investments ........................................................... (2,476,796)
Par value of Common Stock (Note 8) ............................................................... 113,278
Paid-in capital in excess of par value of Common Stock (Note 8) .................................. 82,550,005
----------------
TOTAL NET ASSETS ........................................................................... $ 64,363,213
================
NET ASSET VALUE
(Net Asset Value, offering price and redemption price per share
$64,363,213/11,327,784 shares of beneficial interest outstanding) ................................... $ 5.68
================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
7
BOULDER GROWTH & INCOME FUND, INC.
STATEMENT OF OPERATIONS
--------------------------------------------------------------------------------
FOR THE SIX MONTHS ENDED MAY 31, 2003 (UNAUDITED)
INVESTMENT INCOME:
Dividends ........................................................................................ $ 779,707
Interest ......................................................................................... 152,284
----------------
TOTAL INVESTMENT INCOME .................................................................... 931,991
EXPENSES:
Investment co-advisory fees (Note 2) ........................................... $ 332,120
Administration fee (Note 2) .................................................... 91,916
Interest on outstanding loan payable (Note 9) .................................. 59,292
Printing fees .................................................................. 32,010
Legal fees ..................................................................... 29,947
Directors fees and expenses (Note 2) ........................................... 26,420
Insurance fees ................................................................. 19,403
NYSE fees ...................................................................... 16,381
Audit fees ..................................................................... 12,000
Other .......................................................................... 56,773
----------------
TOTAL EXPENSES ............................................................................. 676,262
----------------
NET INVESTMENT INCOME ............................................................................... 255,729
================
REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS:
Net realized loss on investments sold during the period .......................................... (2,950,818)
Change in unrealized appreciation of investments during the period ............................... 6,063,894
----------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS ..................................................... 3,113,076
----------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ................................................ $ 3,368,805
================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
8
BOULDER GROWTH & INCOME FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
SIX MONTHS ENDED FOR THE FIVE MONTH
MAY 31, 2003 PERIOD ENDED
(UNAUDITED) NOVEMBER 30, 2002
--------------------- ---------------------
OPERATIONS:
Net investment income ...................................................... $ 255,729 $ 123,855
Net realized loss on investments sold during the period .................... (2,950,818) (2,706,714)
Change in unrealized appreciation/(depreciation) of investments during
the period .............................................................. 6,063,894 (621,771)
-------------- --------------
Net increase/(decrease) in net assets resulting from operations ............ 3,368,805 (3,204,630)
DISTRIBUTIONS:
Dividends paid from net investment income to shareholders .................. (736,306) --
-------------- --------------
TOTAL DISTRIBUTIONS ........................................................... (736,306) --
PROCEEDS FROM RIGHTS OFFERING (NOTE 8) ........................................ 24,581,291 --
EXPENSES INCURRED FOR RIGHTS OFFERING (NOTE 8) ................................ (159,614) --
NET INCREASE/(DECREASE) IN NET ASSETS FOR THE PERIOD .......................... 27,054,176 (3,204,630)
NET ASSETS:
Beginning of period ........................................................ 37,309,037 40,513,667
-------------- --------------
End of period (including distribution in excess of investment inome of
($108,468) and undistributed net investment income of $372,109,
respectively). .......................................................... $ 64,363,213 $ 37,309,037
============== ==============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
9
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.
FIVE MONTH
SIX MONTHS PERIOD
ENDED ENDED YEAR ENDED JUNE 30,
MAY 31, 2003 NOVEMBER 30, ------------------------------------------------------
(UNAUDITED) 2002(B) 2002 2001 2000 1999
--------- -------- ---------- ---------- ---------- ----------
OPERATING PERFORMANCE:
Net asset value, beginning of period..... $ 6.59 $ 7.15 $ 8.65 $ 8.96 $ 10.07 $ 10.75
--------- -------- ---------- ---------- ---------- ----------
Net investment income/(loss)............. (0.01) 0.02 0.58 0.70 0.67 0.78
Net realized and unrealized gain/(loss) on
investments........................ 0.24 (0.58) (1.49) (0.31) (1.02) (0.70)
--------- -------- ---------- ---------- ---------- ----------
Total from investment operations......... 0.23 (0.56) (0.91) 0.39 (0.35) 0.08
--------- -------- ---------- ---------- ---------- ----------
DISTRIBUTIONS:
Dividends paid from net investment
income to shareholders............. (0.07) -- (0.59) (0.70) (0.76) (0.76)
--------- -------- ---------- ---------- ---------- ----------
Total distributions...................... (0.07) -- (0.59) (0.70) (0.76) (0.76)
--------- -------- ---------- ---------- ---------- ----------
Anti-Dilutive/(Dilutive) Impact of Rights
Offering ++........................ (1.07) -- -- -- -- --
Net asset value, end of period........... $ 5.68 $ 6.59 $ 7.15 $ 8.65 $ 8.96 $ 10.07
========= ========== ========== ========== ========== ==========
Market value, end of period.............. $ 4.85 $ 5.22 $ 6.78 $ 8.50 $ 8.25 $ 9.63
========= ========== ========== ========== ========== ==========
Total investment return based on net
asset value ....................... (12.56)%+++ (7.83)%+++ (11.36)%(a) 4.41%(a) (3.70)%(a) 0.64%(a)
========= ========== ========== ========== ========== ==========
Total investment return based on
market value ...................... (5.75)%+++ (23.01)%+++ (14.47)%(a) 11.77%(a) (6.81)%(a) 7.85%(a)
========= ========== ========== ========== ========== ==========
RATIOS AND SUPPLEMENTAL DATA:
Ratio of expenses to average net assets . 2.18%(c) 4.40%(c) 1.95%+ 1.82%+ 2.51%+ 1.12%
Ratio of net investment income to
average net assets................. 0.90%(c) 0.79%(c) 6.96% 8.03% 7.08% 7.46%
SUPPLEMENTAL DATA:
Portfolio turnover rate.................. 17% 21% 180% 83% 53% 58%
Net assets, end of period (in 000's)..... $ 64,363 $ 37,309 $ 40,514 $ 48,990 $ 50,591 $ 56,841
Number of shares outstanding at end of
period (in 000's).................. 11,328 5,664 5,664 5,664 5,644 5,644
YEAR ENDED
JUNE 30,
----------
1998
----------
OPERATING PERFORMANCE:
Net asset value, beginning of period..... $ 10.17
----------
Net investment income/(loss)............. 0.75
Net realized and unrealized gain/(loss) on
investments........................ 0.59
----------
Total from investment operations......... 1.34
----------
DISTRIBUTIONS:
Dividends paid from net investment
income to shareholders............. (0.76)
----------
Total distributions...................... (0.76)
----------
Anti-Dilutive/(Dilutive) Impact of Rights
Offering ++........................ --
Net asset value, end of period........... $ 10.75
==========
Market value, end of period.............. $ 9.63
==========
Total investment return based on net
asset value ....................... 13.57%(a)
==========
Total investment return based on
market value ...................... 14.01%(a)
==========
RATIOS AND SUPPLEMENTAL DATA:
Ratio of expenses to average net assets . 1.12%
Ratio of net investment income to
average net assets................. 7.11%
SUPPLEMENTAL DATA:
Portfolio turnover rate.................. 73%
Net assets, end of period (in 000's)..... $ 60,670
Number of shares outstanding at end of
period (in 000's).................. 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) Ratios are annualized.
+ 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 24,581,291.28 in net proceeds. The Rights
Offering had a (1.06) NAV impact and the $159,614 expenses associated with
the Rights Offering had a (.01) NAV impact.
+++ Returns are not annualized. Calculation of these returns are based on the
lesser of the net asset value or market value on distribution date.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
10
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 trust ("REITs") and registered investment companies ("RICs") are
recorded as income. If the Fund is subsequently informed that such distributions
received or a portion thereof are designated as returns of capital, the Fund
will reclassify such amounts from income and reduce the cost basis of such
securities.
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 expected to be declared and paid annually. The Fund had been
declaring and paying dividends quarterly, however the Fund's Board of Directors
changed this policy to an annual payout rather than quarterly at the April 2002
Board of Directors meeting. 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.
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.
11
BOULDER GROWTH & INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED)
2. INVESTMENT CO-ADVISORY FEES, DIRECTORS' FEES, 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 (the "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 are received, are invested.
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. Under the Administration
Agreement, the Fund pays 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 FASis
required to pay any fees for outsourcing any administrative, custodial or
transfer agency services, which it has 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.
Effective January 28, 2002, the Fund pays each Director who is not a
director, officer or employee of the Advisers or FAS a fee of $3,000 for each
in-person meeting of the Board of Directors and $500 for each telephone meeting.
In addition, the Fund will reimburse all Directors for travel and out-of-pocket
expenses incurred in connection with such meetings.
FAS has hired PFPC Inc. ("PFPC"), an indirect, majority-owned subsidiary of
The PNC Financial Services Group Inc., to serve as the Fund's Sub-administrator
and Custodian. As Sub-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. FAS 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, FAS pays PFPC Trust Company a monthly fee based on the Fund's average
monthly gross assets.
Mellon Investor Services, LLC ("Mellon"), serves as the Fund's Transfer
Agent. FAS pays Mellon an annual Transfer Agent fee as well as certain expenses.
The Fund may also pay for certain out-of-pocket expenses.
3. CHANGE IN THE FUND'S INVESTMENT POLICIES, INVESTMENT ADVISERS AND RISKS
INVOLVED
CHANGE IN INVESTMENT POLICIES
At a meeting held January 23, 2002, the Board of Directors voted to
eliminate the Fund's non-fundamental investment policy which prohibited the Fund
from investing for purposes of control or management of any company. Removal of
this restriction provides the Fund with flexibility to consider a full range of
reasonable investment options when the Advisers consider a particular
investment. The Advisers currently do not intend to pursue this type of
investment in most circumstances.
The Board also voted to eliminate the Fund's non-fundamental investment
policy which prohibited the Fund from investing in other registered investment
companies. Under current law, the Fund is able to purchase up to 3% of the
voting securities of any one RIC and invest up to an aggregate of 10% of the
Fund's assets in RICs.
CHANGE IN PORTFOLIO MANAGER
On April 26, 2002, shareholders approved new advisory agreements with BIA
and SIA, resulting in a change to the persons who are primarily responsible for
the day-to-day management of the Fund's portfolio. Stewart R. Horejsi is the
primary portfolio manager for SIA and is the Fund's primary portfolio manager.
He is responsible for the day-to-day strategic management of the Fund's assets.
Mr. Horejsi has full discretion regarding specific investment decisions and the
Fund's asset allocation among cash, common stocks and fixed income investments.
In addition to the Fund, Mr. Horejsi has also managed the Boulder Total Return
Fund, Inc. ("BTF")
12
BOULDER GROWTH & INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED)
since August 1999. BTF is a closed-end registered investment company traded on
the NYSE. Mr. Horejsi was General Manager of Brown Welding Supply, LLC, from
April 1994 until the company's sale in 1999; and the President or Manager of
various subsidiaries associated with the Horejsi family since the early 1980's.
Mr. Horejsi has been the investment adviser for the Horejsi family trusts (i.e.,
the Lola Brown Trust, the Ernest Horejsi Trust No. 1B, the Stewart R. Horejsi
Trust No. 2 and certain other related trusts and affiliates) since the early
1980's. As of July 31, 2002, the size of these trusts' and affiliates' common
stock portfolio was approximately $574 million. Mr. Horejsi has been the
Director and President of the Horejsi Family Charitable Foundation, Inc. since
1997. Mr. Horejsi received a Masters Degree in Economics from Indiana University
in 1961 and a Bachelor of Science Degree in Industrial Management from the
University of Kansas in 1959.
Carl D. Johns, the Fund's Vice President and Treasurer, is responsible for
managing the bonds in the Fund's portfolio. Mr. Johns has assisted in the
management of BTF since August 1999. Prior to joining BIA, he worked at Flaherty
& Crumrine Incorporated, an investment adviser, from 1992 to 1998. During that
period he was an Assistant Treasurer for three NYSE-listed investment companies.
Mr. Johns received a Bachelors Degree in Mechanical Engineering at the
University of Colorado in 1985, and a Masters Degree in Finance from the
University of Colorado in 1991.
CHANGES IN RISK
Risk is inherent in all investing. Investing in any investment company
security involves risk, including the risk that you may receive little or no
return on your investment or that you may lose part or all of your investment.
Therefore, before investing you should consider carefully the following risks
that you assume when you invest.
On April 26, 2002, the Fund's shareholders approved changes to the Fund's
investment objective and certain investment restrictions. As a result of the
changes to the Fund, the primary risks of investing in the Fund have changed.
The Fund formerly held a substantial amount of non-investment grade bonds
("junk bonds"), many of which the Advisers believe are risky investments. The
Fund has substantially transitioned away from these investments and has made
substantial investment in common stocks, for capital appreciation, as well as
common stocks that pay dividends, including real estate investment trusts
("REITs") and other closed-end investment companies ("RICs"). Investing in
common stocks may subject shareholders to more risk than investing in
bonds.While both bonds and common stocks are subject to market risk (i.e., the
risk that the price of a security (a stock or bond) will rise or fall due to
various unpredictable market conditions), common stock price variability has
been historically greater than that of bonds.
The Fund is now a "non-diversified management company" as defined by the
Investment Company Act of 1940, as amended (the "1940 Act"). This permits the
Fund to buy significant positions in stocks of companies that the Advisers find
attractive, resulting in the Fund holding larger positions in fewer companies. 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, 2003, 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 asset 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 may now invest up to 10% of its assets in other investment
companies registered under the 1940 Act. The Fund may invest in other closed-end
RICs when they are trading at a discount, and when market conditions seem
appropriate to the Advisers. The Fund intends to normally invest in RICs that
pay dividends. The risks associated with investments in RICs include the risk
that the dividend paid by the RIC could be reduced or eliminated. As a
shareholder in another fund, the Fund will bear its ratable share of that fund's
expenses, including management fees, and remains subject to the Fund's advisory
and administrative fees with respect to the assets so invested.
13
BOULDER GROWTH & INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED)
4. PURCHASES AND SALES OF SECURITIES
Cost of purchases and proceeds from sales of securities for the period
ended May 31, 2003, excluding short-term investments, aggregated $34,190,469 and
$8,120,340 respectively.
5. COMMON STOCK
At May 31, 2003, 250,000,000 of $0.01 par value Common Stock were
authorized.
6. SIGNIFICANT SHAREHOLDERS
On May 31, 2003, trusts and other entities affiliated with the Horejsi
family owned 2,467,800 shares of Common Stock of the Fund, representing
approximately 21.79% 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 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 May 31, 2003, the expense associated with the rights offering totaled
$159,614.
9. LOAN OUTSTANDING
On February 21, 2003 an agreement between the Fund and Custodial Trust
Company of Bear Stearns was reached, 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. As of May 31, 2003 the Fund had a loan payable in the
amount of $20,000,000 with a daily interest rate of 2.31625%.
10. DEFERRED COMPENSATION
At May 31, 2003, the Fund had a deferred compensation liability to a former
Director of the Fund which totaled $132,437, including any accrued interest.
14
BOULDER GROWTH & INCOME FUND, INC.
MEETING OF SHAREHOLDERS -- VOTING RESULTS (UNAUDITED)
On April 22, 2003, the Fund held its Annual Meeting of Shareholders to (1)
elect Susan L. Ciciora and Joel W. Looney as Directors of the Fund, (2) approve
or disapprove the elimination of the Fund's fundamental investment restriction
regarding short sales, and (3) approve or disapprove an amendment to the Fund's
fundamental investment restriction regarding industry concentration.
PROPOSAL 1: (VOTING BY SHAREHOLDERS):
ELECTION OF SUSAN L. CICIORA AS DIRECTOR OF THE FUND
----------------------------------------------------
# OF VOTES CAST % OF VOTES CAST
----------------- -----------------
Affirmative ............................................................. 6,368,504 83.7
Withheld ................................................................ 1,244,089 16.3
---------- -------
TOTAL .......................................................... 7,612,593 100.0
========== =======
ELECTION OF JOEL W. LOONEY AS DIRECTOR OF THE FUND
--------------------------------------------------
# OF VOTES CAST % OF VOTES CAST
----------------- -----------------
Affirmative ............................................................. 6,371,558 83.7
Withheld ................................................................ 1,241,035 16.3
---------- -------
TOTAL .......................................................... 7,612,593 100.0
========== =======
PROPOSAL 2: (VOTING BY SHAREHOLDERS):
APPROVE OR DISAPPROVE THE ELIMINATION OF THE FUND'S
FUNDAMENTAL INVESTMENT RESTRICTION REGARDING SHORT SALES
---------------------------------------------------------
# OF VOTES CAST % OF VOTES CAST
----------------- -----------------
For ..................................................................... 5,140,292 76.5
Against ................................................................. 1,450,597 21.6
Abstain ................................................................. 131,918 1.9
---------- -------
TOTAL .......................................................... 6,722,807 100.0
========== =======
PROPOSAL 3: (VOTING BY SHAREHOLDERS):
APPROVE OR DISAPPROVE AN AMENDMENT TO THE FUND'S FUNDAMENTAL
INVESTMENT RESTRICTION REGARDING INDUSTRY CONCENTRATION
------------------------------------------------------------
# OF VOTES CAST % OF VOTES CAST
----------------- -----------------
For ..................................................................... 5,763,575 85.7
Against ................................................................. 822,698 12.2
Abstain ................................................................. 136,534 2.1
---------- -------
TOTAL .......................................................... 6,722,807 100.0
========== =======
15
BOULDER GROWTH & INCOME FUND, INC.
85 Challenger Road
Ridgefield Park, NJ 07660
[GRAPHIC OMITTED]
MOUNTAIN ART
BOULDER
GROWTH & INCOME
FUND, INC.
(NYSE: BIF)
-----------------------------------------------
SEMI-ANNUAL REPORT
MAY 31, 2003
DIRECTORS
Brig. Gen (Ret.) Alfred G. Aldridge Jr.
Richard I. Barr
Susan L. Ciciora
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 -- Mellon
Investor Services LLC, at:
85 Challenger Road
Ridgefield Park, NJ 07660
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. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. [RESERVED]
ITEM 9. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive officer or officers and principal
financial officer or 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
(17 CFR 270.30a-3(c))) are effective, based on their evaluation of
these controls and procedures as of a date within 90 days of the filing
date of the report that includes the disclosure required by this
paragraph.
(b) There were no significant changes in the registrant's internal controls
or in other factors that could significantly affect these controls
subsequent to the date of their evaluation, including any corrective
actions with regard to significant deficiencies and material
weaknesses.
ITEM 10. EXHIBITS.
(a)(1) Not applicable.
(a)(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002 are attached hereto.
(b) Certifications pursuant to 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 24, 2003
-------------------------------------------------------------
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 24, 2003
-------------------------------------------------------------
By (Signature and Title)* /S/ CARL D. JOHNS
---------------------------------------
Carl D. Johns, Vice President and Treasurer
(principal financial officer)
Date JULY 24, 2003
-------------------------------------------------------------
* Print the name and title of each signing officer under his or her signature.