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 811-01701
Davis New York Venture Fund, Inc.
(Exact name of registrant as specified in charter)
2949 East Elvira Road, Suite 101
Tucson, Arizona 85706
(Address of principal executive offices)
Thomas D. Tays
Davis Selected Advisers, LP
2949 East Elvira Road, Suite 101
Tucson, Arizona 85706
(Name and address of agent for service)
Registrant's telephone number, including area code: (520) 806-7600
Date of fiscal year end: July 31
Date of reporting period: July 31, 2004
ITEM 1. REPORTS TO STOCKHOLDERS
ANNUAL REPORT
[DAVIS FUNDS LOGO]
JULY 31, 2004
DAVIS NEW YORK
VENTURE FUND
TABLE OF CONTENTS
Shareholder Letter............................................................2
Management's Discussion and Analysis..........................................3
Fund Performance and Supplementary Information................................5
Schedule of Investments......................................................14
Statement of Assets and Liabilities..........................................19
Statement of Operations......................................................21
Statements of Changes in Net Assets..........................................22
Notes to Financial Statements................................................23
Financial Highlights.........................................................31
Report of Independent Registered Public Accounting Firm......................36
Fund Information.............................................................37
Directors and Officers.......................................................38
DAVIS NEW YORK VENTURE FUND
2949 East Elvira Road, Suite 101
Tucson, Arizona 85706
================================================================================
Dear Fellow Shareholder,
As stewards of our customers' savings, the management team and Directors of the
Davis New York Venture Fund recognize the importance of candid, thorough, and
regular communication with our shareholders. In our annual and semi-annual
reports, we include all of the required quantitative information, such as
audited financial statements, detailed footnotes, performance reports, fund
holdings, and performance attribution. Also included is a list of positions
opened and closed.
In addition we produce a Quarterly Review. In this Review, we give a more
qualitative perspective on fund performance, discuss our thoughts on individual
holdings, and share our investment outlook. You may obtain a copy of the current
Quarterly Review either at our website, www.davisfunds.com, or by calling
1-800-279-0279.
Sincerely,
/s/ Christopher C. Davis
- ------------------------
Christopher C. Davis
President
September 3, 2004
2
DAVIS NEW YORK VENTURE FUND
2949 East Elvira Road, Suite 101
Tucson, Arizona 85706
================================================================================
MANAGEMENT'S DISCUSSION AND ANALYSIS
MARKET ENVIRONMENT
During the year ended July 31, 2004, the stock market, as measured by the
Standard & Poor's 500(R) Index(1), returned 13.17%. U.S. economic activity, as
measured by the gross domestic product, improved sharply in the third and fourth
quarters of 2003. Economic activity continued to increase in the first two
quarters of 2004, but at a slower rate. Interest rates, as measured by the
10-year Treasury bond, traded in a narrow range from August 2003 through
mid-January 2004. Interest rates then decreased, to begin a rapid rise in
mid-March until peaking in June 2004. Interest rates decreased from that point
to the end of the fiscal year. The S&P 500(R) Index increased steadily from
August through December 2003, and has been in a narrow trading range in 2004.
Davis Advisors' investment strategy is driven by individual stock selection in
which we attempt to construct an "all-weather" portfolio which is not optimized
to a single set of economic conditions.
PERFORMANCE OVERVIEW
Davis New York Venture Fund's Class A shares delivered a total return on net
asset value of 18.10% for the fiscal year ended July 31, 2004(2) out-performing
the Standard & Poor's 500(R) Index(1) by almost 5 percentage points. The Fund's
investment strategy is to seek out companies with expanding earnings that can be
purchased at value prices and held for the long-term. Typically, the Fund
invests the majority of its assets in equity securities issued by large
companies with market capitalizations of at least $10 billion.
The Fund's largest holdings over the fiscal year were in financial service
companies, banks and savings & loan associations, and property/casualty
insurance companies. The size of these holdings, and their strong performance
through the fiscal year, were important factors to the Fund's performance.
The Fund's energy holdings enjoyed very strong performance over the fiscal year,
performing much better than other energy companies included in the benchmark,
and making an important contribution to performance. Holdings in cable
television, diversified commercial services, pharmaceutical and health care, and
telecommunications were among the holdings which reduced the short-term
performance of the Fund.
Over the course of the fiscal year Davis Advisors identified a number of
investment opportunities in foreign companies. As a group, foreign companies
made a positive contribution to performance during the fiscal year ended July
31, 2004. As of year-end, approximately 13% of net assets was invested in
foreign companies.
The principal holdings contributing to performance were: Tyco International(3),
a diversified manufacturing company, Altria Group, a consumer products company,
and American Express, a financial service company. All three companies are among
the Fund's top ten holdings. Tyco International increased by 66.98%, Altria
Group increased by 25.70%, and American Express increased by 14.69% over the
fiscal year ended July 31, 2004.
The principal detractors from performance were: Comcast, a cable television
company, Fifth Third Bancorp, a banks and savings & loan association, and
Rentokil Initial, a diversified commercial service company. Since being
purchased in January 2004, Comcast decreased by 22.36% and Rentokil Initial
decreased by 25.14%. Fifth Third Bancorp decreased by 9.82% since being
purchased in August 2003.
3
DAVIS NEW YORK VENTURE FUND
2949 East Elvira Road, Suite 101
Tucson, Arizona 85706
================================================================================
MANAGEMENT'S DISCUSSION AND ANALYSIS - (CONTINUED)
A company's contribution to the Fund's performance is a product of both its
appreciation or depreciation and its weighting within the portfolio. For
example, a 5% holding that rises 20% has twice as much impact as a 1% holding
that rises 50%.
- -----------------------------------------
This Annual Report is authorized for use by existing shareholders. Prospective
shareholders must receive a current Davis New York Venture Fund prospectus,
which contains more information about investment strategies, risks, charges, and
expenses. Please read the prospectus carefully before investing or sending
money.
Davis New York Venture Fund's investment objective is long-term growth of
capital. There can be no assurance that the Fund will achieve its objective. The
primary risks of an investment in Davis New York Venture Fund are: (1) market
risk, (2) company risk, (3) headline risk, and (4) selection risk. See the
prospectus for a full description of each risk.
(1) The S&P 500(R) Index is an unmanaged index of 500 selected common stocks,
most of which are listed on the New York Stock Exchange. The index is adjusted
for dividends, weighted towards stocks with large market capitalizations, and
represents approximately two-thirds of the total market value of all domestic
common stocks. Investments cannot be made directly in the index.
(2) Total return assumes reinvestment of dividends and capital gain
distributions. Past performance is not a guarantee of future results. Investment
return and principal value will vary so that, when redeemed, an investor's
shares may be worth more or less than when purchased. Below are the average
annual total returns for Davis New York Venture Fund's Class A shares for the
periods ended July 31, 2004. Returns for other classes of shares will vary from
the following returns:
(Without a 4.75% sales charge taken into consideration)
- -------------------------------- -------------- ---------------- --------------- ----------------------
FUND NAME ONE YEAR FIVE YEARS TEN YEARS INCEPTION
- -------------------------------- -------------- ---------------- --------------- ----------------------
Davis New York Venture A 18.10% 2.74% 12.94% 13.31% - 02/17/69
- -------------------------------- -------------- ---------------- --------------- ----------------------
- -------------------------------------------------------------------------------------------------------
(With the maximum 4.75% sales charge taken into consideration)
- -------------------------------- -------------- ---------------- --------------- ----------------------
FUND NAME ONE YEAR FIVE YEARS TEN YEARS INCEPTION
- -------------------------------- -------------- ---------------- --------------- ----------------------
Davis New York Venture A 12.50% 1.75% 12.39% 13.15% - 02/17/69
- -------------------------------- -------------- ---------------- --------------- ----------------------
Fund performance changes over time and current performance may be higher or
lower than stated. For more current information please call Davis Funds
Shareholder Services at 1-800-279-0279.
(3) This Management Discussion and Analysis discusses a number of individual
companies. The information provided in this report does not provide information
reasonably sufficient upon which to base an investment decision and should not
be considered a recommendation to purchase or sell any particular security. The
schedule of investments lists the Fund's holdings of each company discussed.
Shares of the Davis New York Venture Fund are not deposits or obligations of any
bank, are not guaranteed by any bank, are not insured by the FDIC or any other
agency, and involve investment risks, including possible loss of the principal
amount invested.
4
DAVIS NEW YORK VENTURE FUND
CLASS A FUND PERFORMANCE
=================================================================================================================
- -----------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN EXPENSE EXAMPLE
FOR THE PERIODS ENDED JULY 31,
2004 BEGINNING ENDING EXPENSES PAID
(This calculation includes an ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
initial sales charge of 4.75%.) (02/01/04) (07/31/04) (02/01/04-07/31/04)
---------- ---------- -------------------
One Year....................... 12.50% Actual............... $1,000.00 $987.90 $4.45
Five Years..................... 1.75% Hypothetical (5% return
Ten Years...................... 12.39% before expenses)... $1,000.00 $1,020.39 $4.52
- -----------------------------------------------------------------------------------------------------------------
*Expenses are equal to the Class's annualized expense ratio (0.90%), multiplied
by the average account value over the period, multiplied by 182/366 (to reflect
the one-half year period). See Notes to Performance on page 10 for a description
of the "Expense Example".
$10,000 INVESTED OVER TEN YEARS. Let's say you invested $10,000 in Davis New
York Venture Fund, Class A Shares on July 31, 1994 and paid a 4.75% sales
charge. As the chart shows, by July 31, 2004 the value of your investment would
have grown to $32,161 - a 221.61% increase on your initial investment. For
comparison, look at how the Standard & Poor's 500 Stock Index did over the same
period. With dividends reinvested, the same $10,000 investment would have grown
to $28,613 - a 186.13% increase.
[GRAPHIC OMITTED]
S&P 500 DNYVF-A
--------- ---------
Jul-94 10,000.00 9,525.00
Jul-95 12,607.00 12,117.00
Jul-96 14,694.00 13,702.00
Jul-97 22,351.00 21,625.00
Jul-98 26,659.00 24,039.00
Jul-99 32,047.00 28,089.00
Jul-00 34,922.00 31,738.00
Jul-01 29,920.00 29,613.00
Jul-02 22,854.00 24,493.00
Jul-03 25,285.00 27,233.00
Jul-04 28,613.00 32,161.00
The Standard & Poor's 500 Stock Index is an unmanaged index of 500 selected
common stocks, most of which are listed on the New York Stock Exchange. The
index is adjusted for dividends, weighted towards stocks with large market
capitalizations, and represents approximately two-thirds of the total market
value of all domestic common stocks.
The performance data for Davis New York Venture Fund contained in this report
represents past performance and assumes that all distributions were reinvested,
and should not be considered as an indication of future performance from an
investment in the Fund today. The investment return and principal value will
fluctuate so that shares may be worth more or less than their original cost when
redeemed. Returns shown do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares.
5
DAVIS NEW YORK VENTURE FUND
CLASS B FUND PERFORMANCE
==================================================================================================================
- ------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN EXPENSE EXAMPLE
FOR THE PERIODS ENDED JULY 31, 2004 BEGINNING ENDING EXPENSES PAID
(This calculation includes any applicable ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
contingent deferred sales charge.) (02/01/04) (07/31/04) (02/01/04-07/31/04)
---------- ---------- -------------------
One Year....................... 13.18% Actual............... $1,000.00 $984.10 $8.44
Five Years..................... 1.55% Hypothetical (5% return
Life of Class (December 1, 1994 before expenses)... $1,000.00 $1,016.36 $8.57
through July 31,2004)..... 13.14%
- ------------------------------------------------------------------------------------------------------------------
*Expenses are equal to the Class's annualized expense ratio (1.71%), multiplied
by the average account value over the period, multiplied by 182/366 (to reflect
the one-half year period). See Notes to Performance on page 10 for a description
of the "Expense Example".
$10,000 INVESTED AT INCEPTION. Let's say you invested $10,000 in Davis New York
Venture Fund, Class B Shares on December 1, 1994 (inception of class) and
converted to Class A shares on December 1, 2002. As the chart shows, by July 31,
2004 the value of your investment would have grown to $33,015 - a 230.15%
increase on your initial investment. For comparison, look at how the Standard &
Poor's 500 Stock Index did over the same period. With dividends reinvested, the
same $10,000 investment would have grown to $28,970 - a 189.70% increase.
[GRAPHIC OMITTED]
S&P 500 DNYVF-B
--------- ---------
12/1/94 10,000.00 10,000.00
Jul-95 12,774.00 13,262.87
Jul-96 14,878.00 14,833.80
Jul-97 22,631.00 23,210.48
Jul-98 26,990.00 25,581.82
Jul-99 32,438.00 29,633.31
Jul-00 35,344.00 33,206.93
Jul-01 30,288.00 30,728.38
Jul-02 23,138.00 25,204.86
Jul-03 25,602.00 27,955.34
Jul-04 28,970.00 33,014.87
The Standard & Poor's 500 Stock Index is an unmanaged index of 500 selected
common stocks, most of which are listed on the New York Stock Exchange. The
index is adjusted for dividends, weighted towards stocks with large market
capitalizations, and represents approximately two-thirds of the total market
value of all domestic common stocks.
Because Class B shares automatically convert to Class A shares after 8 years,
the above graph and "Life of Class" return for Class B reflects Class A
performance for the period after conversion.
The performance data for Davis New York Venture Fund contained in this report
represents past performance and assumes that all distributions were reinvested,
and should not be considered as an indication of future performance from an
investment in the Fund today. The investment return and principal value will
fluctuate so that shares may be worth more or less than their original cost when
redeemed. Returns shown do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares.
6
DAVIS NEW YORK VENTURE FUND
CLASS C FUND PERFORMANCE
==================================================================================================================
- ------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN EXPENSE EXAMPLE
FOR THE PERIODS ENDED JULY 31, 2004 BEGINNING ENDING EXPENSES PAID
(This calculation includes any applicable ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
contingent deferred sales charge.) (02/01/04) (07/31/04) (02/01/04-07/31/04)
---------- ---------- -------------------
One Year....................... 16.19% Actual............... $1,000.00 $984.20 $8.34
Five Years..................... 1.94% Hypothetical (5% return
Life of Class (December 20, 1994 before expenses)... $1,000.00 $1,016.46 $8.47
through July 31,2004)..... 12.83%
- ------------------------------------------------------------------------------------------------------------------
*Expenses are equal to the Class's annualized expense ratio (1.69%), multiplied
by the average account value over the period, multiplied by 182/366 (to reflect
the one-half year period). See Notes to Performance on page 10 for a description
of the "Expense Example".
$10,000 INVESTED AT INCEPTION. Let's say you invested $10,000 in Davis New York
Venture Fund, Class C Shares on December 20, 1994 (inception of class). As the
chart shows, by July 31, 2004 the value of your investment would have grown to
$31,950 - a 219.50% increase on your initial investment For comparison, look at
how the Standard & Poor's 500 Stock Index did over the same period. With
dividends reinvested, the same $10,000 investment would have grown to $28,452 -
a 184.52% increase.
[GRAPHIC OMITTED]
S&P 500 DNYVF-C
--------- ---------
12/20/94 10,000.00 10,000.00
Jul-95 12,546.00 12,966.00
Jul-96 14,612.00 14,497.00
Jul-97 22,226.00 22,701.00
Jul-98 26,507.00 25,034.00
Jul-99 31,857.00 29,026.00
Jul-00 34,712.00 32,531.00
Jul-01 29,746.00 30,115.00
Jul-02 22,724.00 24,710.00
Jul-03 25,144.00 27,264.00
Jul-04 28,452.00 31,950.00
The Standard & Poor's 500 Stock Index is an unmanaged index of 500 selected
common stocks, most of which are listed on the New York Stock Exchange. The
index is adjusted for dividends, weighted towards stocks with large market
capitalizations, and represents approximately two-thirds of the total market
value of all domestic common stocks.
The performance data for Davis New York Venture Fund contained in this report
represents past performance and assumes that all distributions were reinvested,
and should not be considered as an indication of future performance from an
investment in the Fund today. The investment return and principal value will
fluctuate so that shares may be worth more or less than their original cost when
redeemed. Returns shown do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares.
7
DAVIS NEW YORK VENTURE FUND
CLASS R FUND PERFORMANCE
==================================================================================================================
- ------------------------------------------------------------------------------------------------------------------
TOTAL RETURN FOR THE PERIOD EXPENSE EXAMPLE
ENDED JULY 31, 2004 BEGINNING ENDING EXPENSES PAID
(There is no sales charge applicable ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
to this calculation.) (02/01/04) (07/31/04) (02/01/04-07/31/04)
---------- ---------- -------------------
Actual............... $1,000.00 $987.60 $5.63
Life of Class (August 20, 2003 Hypothetical (5% return
through July 31,2004)..... 16.67% before expenses)... $1,000.00 $1,019.19 $5.72
- ------------------------------------------------------------------------------------------------------------------
*Expenses are equal to the Class's annualized expense ratio (1.14%), multiplied
by the average account value over the period, multiplied by 182/366 (to reflect
the one-half year period). See Notes to Performance on page 10 for a description
of the "Expense Example".
$10,000 INVESTED AT INCEPTION. Let's say you invested $10,000 in Davis New York
Venture Fund, Class R Shares on August 20, 2003 (inception of class). As the
chart shows, by July 31, 2004 the value of your investment would have grown to
$11,667 - a 16.67% increase on your initial investment. For comparison, look at
how the Standard & Poor's 500 Stock Index did over the same period. With
dividends reinvested, the same $10,000 investment would have grown to $11,203 -
a 12.03% increase.
[GRAPHIC OMITTED]
S&P 500 DNYVF-R
--------- ---------
8/20/03 10,000.00 10,000.00
Jul-04 11,203.00 11,667.00
The Standard & Poor's 500 Stock Index is an unmanaged index of 500 selected
common stocks, most of which are listed on the New York Stock Exchange. The
index is adjusted for dividends, weighted towards stocks with large market
capitalizations, and represents approximately two-thirds of the total market
value of all domestic common stocks.
The performance data for Davis New York Venture Fund contained in this report
represents past performance and assumes that all distributions were reinvested,
and should not be considered as an indication of future performance from an
investment in the Fund today. The investment return and principal value will
fluctuate so that shares may be worth more or less than their original cost when
redeemed. Returns shown do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares.
8
DAVIS NEW YORK VENTURE FUND
CLASS Y FUND PERFORMANCE
==================================================================================================================
- ------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN EXPENSE EXAMPLE
FOR THE PERIODS ENDED JULY 31, 2004 BEGINNING ENDING EXPENSES PAID
(There is no sales charge applicable ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
to this calculation.) (02/01/04) (07/31/04) (02/01/04-07/31/04)
---------- ---------- -------------------
One Year....................... 18.53% Actual............... $1,000.00 $989.80 $2.97
Five Years..................... 3.07% Hypothetical (5% return
Life of Class (October 2, 1996 before expenses)... $1,000.00 $1,021.88 $3.02
through July 31,2004)..... 10.59%
- ------------------------------------------------------------------------------------------------------------------
*Expenses are equal to the Class's annualized expense ratio (0.60%), multiplied
by the average account value over the period, multiplied by 182/366 (to reflect
the one-half year period). See Notes to Performance on page 10 for a description
of the "Expense Example".
$10,000 INVESTED AT INCEPTION. Let's say you invested $10,000 in Davis New York
Venture Fund, Class Y Shares on October 2, 1996 (inception of class). As the
chart shows, by July 31, 2004 the value of your investment would have grown to
$21,990 - a 119.90% increase on your initial investment. For comparison, look at
how the Standard & Poor's 500 Stock Index did over the same period. With
dividends reinvested, the same $10,000 investment would have grown to $17,854 -
a 78.54% increase.
[GRAPHIC OMITTED]
S&P 500 DNYVF-Y
--------- ---------
10/2/96 10,000.00 10,000.00
Jul-97 13,947.00 14,471.06
Jul-98 16,634.00 16,131.68
Jul-99 19,991.00 18,904.20
Jul-00 21,782.00 21,423.89
Jul-01 18,666.00 20,052.00
Jul-02 14,260.00 16,634.00
Jul-03 15,778.00 18,552.00
Jul-04 17,854.00 21,990.00
The Standard & Poor's 500 Stock Index is an unmanaged index of 500 selected
common stocks, most of which are listed on the New York Stock Exchange. The
index is adjusted for dividends, weighted towards stocks with large market
capitalizations, and represents approximately two-thirds of the total market
value of all domestic common stocks.
The performance data for Davis New York Venture Fund contained in this report
represents past performance and assumes that all distributions were reinvested,
and should not be considered as an indication of future performance from an
investment in the Fund today. The investment return and principal value will
fluctuate so that shares may be worth more or less than their original cost when
redeemed. Returns shown do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares.
9
DAVIS NEW YORK VENTURE FUND
NOTES TO PERFORMANCE
================================================================================
THE FOLLOWING DISCLOSURE PROVIDES IMPORTANT INFORMATION REGARDING THE FUND'S
EXPENSE EXAMPLE, WHICH APPEARS IN EACH CLASS'S FUND PERFORMANCE SECTION IN THIS
ANNUAL REPORT. PLEASE REFER TO THIS INFORMATION WHEN REVIEWING THE EXPENSE
EXAMPLE FOR EACH CLASS.
EXAMPLE
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchases; and (2) ongoing costs,
including advisory and administrative fees, distribution and/or service (12b-1)
fees, and other Fund expenses. The Expense Example is intended to help you
understand your ongoing costs (in dollars) of investing in the Fund and to
compare these costs with the ongoing costs of investing in other mutual funds.
The Expense Example is based on an investment of $1,000 invested at the
beginning of the period and held for the entire period indicated, which for each
class is from 02/01/04 to 07/31/04. Please note that the Expense Example is
general and does not reflect certain transaction or account specific costs,
which may increase your total costs of investing in the Fund. If these
transaction or account specific costs were included in the Expense Example, the
expenses would have been higher.
ACTUAL EXPENSES
The information represented in the row entitled "Actual" provides information
about actual account values and actual expenses. You may use the information in
this row, together with the amount you invested, to estimate the expenses that
you paid over the period. Simply divide your account value by $1,000 (for
example, an $8,600 account value divided by $1,000 = 8.6), then multiply the
result by the number under the heading "Expenses Paid During Period" to estimate
the expenses you paid for on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The information represented in the row entitled "Hypothetical (5% return before
expenses)" provides information about hypothetical account values and
hypothetical expenses based on the Fund's actual expense ratio and an assumed
rate of return of 5% per year before expenses, which is not the Fund's actual
return. The hypothetical account values and expenses may not be used to estimate
the actual ending account balance or expenses you paid for the period. You may
use this information to compare the ongoing costs of investing in the Fund and
other funds. To do so, compare this 5% hypothetical example with the 5%
hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads). Therefore the information in the row entitled "Hypothetical (5%
return before expenses)" is useful in comparing ongoing costs only, and will not
help you determine the relative total costs of owning different funds. In
addition, if these transactional costs were included, your costs would have been
higher.
10
DAVIS NEW YORK VENTURE FUND
FUND OVERVIEW
At July 31, 2004
================================================================================
PORTFOLIO MAKEUP (% OF FUND NET ASSETS)
[GRAPHIC OMITTED]
[PIE CHART]
Short Term Investments,
Other Assets &
Liabilities
0.3%
Common Stocks
99.7%
SECTOR WEIGHTINGS
(% OF LONG TERM PORTOLIO)
[GRAPHIC OMITTED]
[PIE CHART]
Food & Restaurants 3.9%
Diversified Manufacturing 4.7%
Energy 8.0%
Financial Services 22.1%
Industrial 2.6%
Other 10.9%
Consumer Products 5.1%
Cable Television 1.9%
Banking 13.4%
Phamaceutical and Health Care 3.4%
Discount Retailer 3.2%
Technology 3.2%
Insurance 17.6%
TOP 10 HOLDINGS % OF FUND
STOCK SECTOR NET ASSETS
- -------------------------------------------------------------------------------------------------------------------
American Express Co. Financial Services 7.48%
American International Group, Inc. Multi-Line Insurance 5.34%
Altria Group, Inc. Consumer Products 5.04%
Tyco International Ltd. Diversified Manufacturing 4.65%
Berkshire Hathaway Inc., Class A Property/Casualty Insurance 4.07%
Wells Fargo & Co. Banks and Savings & Loan Associations 3.91%
Citigroup Inc. Financial Services 3.61%
HSBC Holdings PLC Banks and Savings & Loan Associations 3.60%
Golden West Financial Corp. Banks and Savings & Loan Associations 3.36%
Progressive Corp. (Ohio) Property/Casualty Insurance 3.25%
11
DAVIS NEW YORK VENTURE FUND
PORTFOLIO ACTIVITY - AUGUST 1, 2003 THROUGH JULY 31, 2004
================================================================================
NEW POSITIONS ADDED (8/1/03-7/31/04)
(Highlighted positions are those greater than 0.99% of 7/31/04 total net
assets.)
% OF 7/31/04
DATE OF 1ST FUND
SECURITY SECTOR PURCHASE NET ASSETS
- -------------------------------------------------------------------------------------------------------------------
AutoZone, Inc. Automotive 12/10/03 0.83%
Cardinal Health, Inc. Distributors 07/14/04 0.76%
Comcast Corp., Special Class A Cable Television 01/14/04 1.91%
Fifth Third Bancorp Banks and Savings & Loan
Associations 08/13/03 1.24%
HCA Inc. Pharmaceutical and Health Care 10/28/03 0.82%
Marsh & McLennan Cos, Inc. Insurance Brokers 06/28/04 0.94%
Nokia Oyj, ADR Telecommunications 04/14/04 0.24%
Novartis AG, Registered Pharmaceutical and Health Care 12/02/03 0.48%
Occidental Petroleum Corp. Energy 08/01/03 1.05%
Rentokil Initial PLC Diversified Commercial Services 01/13/04 0.42%
SK Telecom Co., Ltd., ADR Telecommunications 04/14/04 0.43%
Transocean Inc. Energy 01/23/04 0.53%
POSITIONS CLOSED (8/1/03-7/31/04)
(Gains and losses greater than $25 million are highlighted.)
DATE OF
STOCK SECTOR FINAL SALE GAIN/(LOSS)
- --------------------------------------------------------------------------------------------------------------------
Agere Systems Inc., Class B Electronics 01/27/04 $ 6,198,724
Applied Materials, Inc. Electronics 11/21/03 51,801,172
BMC Software, Inc. Technology 12/04/03 (161,408,601)
Dover Corp. Diversified Manufacturing 12/22/03 20,901,706
Janus Capital Group Inc. Investment Firms 04/29/04 (83,080,415)
Medco Health Solutions, Inc. Pharmaceutical and Health Care 10/01/03 34,042
Merck & Co., Inc. Pharmaceutical and Health Care 07/29/04 (15,824,874)
RadioShack Corp. Retailing 08/25/03 (6,732,527)
Safeway Inc. Retailing 12/05/03 (173,227,268)
Travelers Property Casualty Corp., Class A Property/Casualty Insurance 09/16/03 4,949,196
Travelers Property Casualty Corp., Class B Property/Casualty Insurance 09/18/03 9,086,248
12
DAVIS NEW YORK VENTURE FUND - CLASS A SHARES
ILLUSTRATION OF THE GROWTH OF AN ASSUMED INVESTMENT OF $10,000
================================================================================
ILLUSTRATION OF THE GROWTH OF AN ASSUMED INVESTMENT
WITH DIVIDENDS REINVESTED AND CAPITAL GAIN DISTRIBUTIONS ACCEPTED IN ADDITIONAL
SHARES
The chart below reflects an assumed investment of $10,000 covering the period
from February 17, 1969 to July 31, 2004, the life of the Fund. The period was
one in which common stock prices fluctuated and was characterized by periods of
substantial market advances as well as periods of substantial market declines.
The results 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.
[GRAPHIC OMITTED]
Value of Shares Value of Shares Cost of Shares Cost of Shares
Value of Initial Purchased Through Purchased Through Purchased Purchased Through
Investment - Dividends - Distributions - Through Dividends Distributions -
$52,312 $151,820 $633,829 - $63,178 $293,792
- ---------------------------------------------------------------------------------------------------------
1969 $9,574.11 $0.00 $0.00 $0.00 $0.00
1970 $7,560.98 $0.00 $96.99 $0.00 $131.58
1971 $10,206.38 $113.29 $130.93 $76.15 $131.58
1972 $12,110.70 $187.61 $155.36 $143.51 $131.58
1973 $10,525.33 $192.52 $364.22 $177.41 $402.76
1974 $7,945.59 $247.26 $274.95 $306.32 $402.76
1975 $8,371.48 $572.10 $324.30 $537.17 $402.76
1976 $10,225.14 $1,007.97 $353.84 $857.06 $402.76
1977 $11,106.94 $1,331.25 $384.35 $1,070.51 $402.76
1978 $13,742.97 $1,985.37 $771.47 $1,331.46 $631.09
1979 $14,549.72 $2,544.00 $1,390.28 $1,749.83 $1,173.85
1980 $17,484.06 $3,674.55 $4,504.18 $2,220.05 $3,333.50
1981 $17,767.38 $4,759.89 $9,242.87 $3,171.12 $7,660.36
1982 $11,069.42 $4,060.53 $12,287.68 $4,381.36 $15,136.73
1983 $17,861.17 $7,918.92 522,564.15 $5,341.65 $16,862.76
1984 $13,320.83 $6,870.98 $24,507.57 $6,362.33 $25,223.04
1985 $16,341.47 $9,740.36 $35,525.07 $7,505.95 $29,646.99
1986 $20,168.86 $13,630.10 $50,784.18 $8,856.01 $34,759.25
1987 $20,412.76 $14,756.17 $67,395.88 $9,793.46 $48,028.73
1988 $15,140.72 $13,720.06 $70,307.97 $12,274.51 $69,336.58
1989 $18,236.40 $20,147.70 $93,944.91 $15,104.62 $76,277.40
1990 $17,617.26 $24,832.66 $100,621.51 $20,266.71 $85,843.97
1991 $18,480.30 $29,338.64 $115,693.88 $23,117.87 $94,103.41
1992 $20,075.05 $35,872.34 $138,105.50 $26,753.67 $104,935.15
1993 $22,682.93 $43,950.45 $166,806.37 $29,949.76 $114,584.13
1994 $22,589.12 $46,958.73 $177,680.42 $33,051.02 $125,826.18
1995 $27,317.08 $60,054.77 $227,122.37 $35,524.58 $135,102.02
1996 $28,592.88 $66,292.19 $260,842.92 $38,777.04 $157,001.91
1997 $43,063.90 $105,131.93 $413,416.38 $42,993.52 $173,399.35
1998 $45,695.00 $118,212.00 $462,430.00 $48.650.02 $193,811.95
1999 $52,124.05 $137,965.68 $541,763.34 $51,355.30 $206,178.97
2000 $57,593.98 $152,517.28 $616,821.25 $51,421.28 $222,542.08
2001 $48,853.38 $130,789.37 $591,923.00 $52,892.16 $293,792.15
2002 $40,357.14 $108,818.18 $488,979.87 $53,782.79 $293,792.15
2003 $44,605.26 $124,486.54 $540,451.44 $57,646.77 $293,792.15
2004 $52,312.02 $151,819.61 $633,829.06 $63,178.40 $293,792.15
[ ] Value of Shares Purchased Through Distributions - $633,829
[ ] Value of Shares Purchased Through Dividends - $151,820
[ ] Value of Initial Investment - $52,312
[ ] Cost of Shares Purchased Through Distributions - $293,792
[ ] Cost of Shares Purchased Through Dividends - $63,178
The performance data for Davis New York Venture Fund contained in this report
represents past performance and assumes that all distributions were reinvested,
and should not be considered as an indication of future performance from an
investment in the Fund today. The investment return and principal value will
fluctuate so that shares may be worth more or less than their original cost when
redeemed. Returns shown do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. This
illustration reflects no sales charge.
13
DAVIS NEW YORK VENTURE FUND
SCHEDULE OF INVESTMENTS
July 31, 2004
==============================================================================================================
VALUE
SHARES SECURITY (NOTE 1)
- --------------------------------------------------------------------------------------------------------------
COMMON STOCK - (99.70%)
AUTOMOTIVE - (0.83%)
2,528,800 AutoZone, Inc.*....................................................... $ 195,223,360
-----------------
BANKS AND SAVINGS & LOAN ASSOCIATIONS - (13.36%)
5,867,200 Fifth Third Bancorp................................................... 290,015,696
7,349,900 Golden West Financial Corp. .......................................... 785,777,809
57,325,535 HSBC Holdings PLC..................................................... 842,091,687
27,625,968 Lloyds TSB Group PLC.................................................. 207,179,558
1,997,500 State Street Corp. ................................................... 85,512,975
15,928,400 Wells Fargo & Co. .................................................... 914,449,444
-----------------
3,125,027,169
-----------------
BUILDING MATERIALS - (1.65%)
4,031,300 Martin Marietta Materials, Inc. (b)................................... 176,369,375
4,414,020 Vulcan Materials Co. ................................................. 210,195,632
-----------------
386,565,007
-----------------
BUSINESS SERVICES - (1.21%)
5,030,700 D&B Corp.* (b)........................................................ 282,423,498
-----------------
CABLE TELEVISION - (1.91%)
16,642,000 Comcast Corp., Special Class A*........................................ 445,922,390
-----------------
CONSUMER PRODUCTS - (5.04%)
24,770,300 Altria Group, Inc. ................................................... 1,179,066,280
-----------------
DISCOUNT RETAILER - (3.14%)
18,092,000 Costco Wholesale Corp. ............................................... 735,530,260
-----------------
DISTRIBUTORS - (0.76%)
4,005,000 Cardinal Health, Inc. ................................................ 178,222,500
-----------------
DIVERSIFIED COMMERCIAL SERVICES - (0.42%)
38,067,500 Rentokil Initial PLC.................................................. 98,335,750
-----------------
DIVERSIFIED MANUFACTURING - (4.65%)
35,072,206 Tyco International Ltd. .............................................. 1,087,238,386
-----------------
ELECTRONICS - (0.07%)
13,300,400 Agere Systems Inc., Class A*.......................................... 16,492,496
-----------------
ENERGY - (8.01%)
8,036,343 ConocoPhillips........................................................ 633,022,738
7,251,643 Devon Energy Corp. ................................................... 503,916,672
5,789,700 EOG Resources, Inc. .................................................. 367,935,435
4,983,500 Occidental Petroleum Corp. ........................................... 245,537,045
4,385,000 Transocean Inc.*...................................................... 124,534,000
-----------------
1,874,945,890
-----------------
FINANCIAL SERVICES - (19.78%)
34,843,400 American Express Co. ................................................. 1,750,880,850
19,139,716 Citigroup Inc. ....................................................... 843,870,078
5,377,600 H&R Block, Inc. ...................................................... 264,201,488
14
DAVIS NEW YORK VENTURE FUND
SCHEDULE OF INVESTMENTS - (Continued)
July 31, 2004
==============================================================================================================
VALUE
SHARES SECURITY (NOTE 1)
- --------------------------------------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)
FINANCIAL SERVICES - (CONTINUED)
18,769,740 JPMorgan Chase & Co. ................................................. $ 700,674,394
7,515,100 Loews Corp. .......................................................... 425,580,113
4,477,700 Moody's Corp. ........................................................ 304,931,370
8,380,600 Providian Financial Corp.*............................................ 115,987,504
3,103,590 Takefuji Corp. (d).................................................... 222,929,024
-----------------
4,629,054,821
-----------------
FOOD/BEVERAGE & RESTAURANT - (3.92%)
28,528,677 Diageo PLC............................................................ 353,684,661
7,849,250 Heineken Holding NV, Class A (d)...................................... 217,576,716
5,422,400 Hershey Foods Corp. .................................................. 262,661,056
2,744,700 Kraft Foods Inc., Class A............................................. 83,850,585
-----------------
917,773,018
-----------------
HOTELS - (0.71%)
3,380,700 Marriott International, Inc., Class A................................. 164,978,160
-----------------
INDUSTRIAL - (2.55%)
12,582,500 Sealed Air Corp.* (b)................................................. 596,913,800
-----------------
INSURANCE BROKERS - (1.91%)
8,643,800 Aon Corp. ............................................................ 228,542,072
4,940,000 Marsh & McLennan Cos, Inc. ........................................... 219,237,200
-----------------
447,779,272
-----------------
INVESTMENT FIRMS - (2.29%)
1,283,952 Julius Baer Holding, Ltd. AG (b)...................................... 345,806,789
3,854,280 Morgan Stanley........................................................ 190,131,632
-----------------
535,938,421
-----------------
LIFE INSURANCE - (0.56%)
2,596,000 Principal Financial Group, Inc. ...................................... 88,238,040
1,498,000 Sun Life Financial Inc. .............................................. 41,644,400
-----------------
129,882,440
-----------------
MEDIA - (1.60%)
4,778,665 Lagardere S.C.A. ..................................................... 290,622,696
8,941,680 WPP Group PLC......................................................... 82,713,960
-----------------
373,336,656
-----------------
MULTI-LINE INSURANCE - (5.34%)
17,699,210 American International Group, Inc. ................................... 1,250,449,187
-----------------
15
DAVIS NEW YORK VENTURE FUND
SCHEDULE OF INVESTMENTS - (Continued)
July 31, 2004
==============================================================================================================
VALUE
SHARES SECURITY (NOTE 1)
- --------------------------------------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)
PHARMACEUTICAL AND HEALTH CARE - (3.42%)
4,522,400 Eli Lilly and Co. .................................................... $ 288,167,328
4,987,000 HCA Inc. ............................................................. 192,747,550
2,495,000 Novartis AG, Registered............................................... 111,671,292
6,476,300 Pfizer Inc. .......................................................... 206,982,548
-----------------
799,568,718
-----------------
PROPERTY/CASUALTY INSURANCE - (8.05%)
10,901 Berkshire Hathaway Inc., Class A*..................................... 951,112,250
13,316 Berkshire Hathaway Inc., Class B*..................................... 38,536,504
1,614,100 Chubb Corp. .......................................................... 111,017,798
79,900 Markel Corp.*......................................................... 22,571,750
9,920,400 Progressive Corp. (Ohio).............................................. 760,101,048
-----------------
1,883,339,350
-----------------
PUBLISHING - (0.58%)
1,625,800 Gannett Co., Inc. .................................................... 135,169,012
-----------------
REAL ESTATE - (1.52%)
802,600 Centerpoint Properties Trust.......................................... 30,803,788
10,782,204 General Growth Properties, Inc. ...................................... 324,328,696
-----------------
355,132,484
-----------------
REINSURANCE - (1.70%)
619,200 Everest Re Group, Ltd. ............................................... 45,498,816
6,208,063 Transatlantic Holdings, Inc. (b)...................................... 351,562,579
-----------------
397,061,395
-----------------
TECHNOLOGY - (3.19%)
5,567,000 Lexmark International, Inc., Class A*................................. 492,679,500
8,915,100 Microsoft Corp. ...................................................... 253,679,171
-----------------
746,358,671
-----------------
TELECOMMUNICATIONS - (0.67%)
4,845,000 Nokia Oyj, ADR........................................................ 56,298,900
5,722,000 SK Telecom Co., Ltd., ADR (d)......................................... 101,050,520
-----------------
157,349,420
-----------------
TRANSPORTATION - (0.86%)
2,802,500 United Parcel Service, Inc., Class B................................... 201,667,900
-----------------
Total Common Stocks - (identified cost $17,376,399,120)........ 23,326,745,711
-----------------
16
DAVIS NEW YORK VENTURE FUND
SCHEDULE OF INVESTMENTS - (Continued)
July 31, 2004
==============================================================================================================
VALUE
PRINCIPAL SECURITY (NOTE 1)
- --------------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS - (0.09%)
$ 9,125,000 Lehman Brothers Inc. Joint Repurchase Agreement,
1.37%, 08/02/04, dated 07/30/04, repurchase value of
$9,126,042 (collateralized by: U.S. Government obligations
in a pooled cash account, total market value $9,307,500).......... $ 9,125,000
12,220,000 Nomura Securities International, Inc. Joint Repurchase Agreement,
1.37%, 08/02/04, dated 07/30/04, repurchase value of
$12,221,395 (collateralized by: U.S. Government obligations
in a pooled cash account, total market value $12,464,400)......... 12,220,000
-----------------
Total Repurchase Agreements - (identified cost $21,345,000).... 21,345,000
-----------------
INVESTMENT OF CASH COLLATERAL FOR SECURITIES LOANED - (1.27%)
MONEY MARKET INSTRUMENTS - (0.20%)
48,650,913 UBS Private Money Market LLC, 1.272%
(identified cost $48,650,913).................................. 48,650,913
-----------------
REPURCHASE AGREEMENTS - (1.07%)
106,873,000 Lehman Brothers Inc. Joint Repurchase Agreement,
1.37%, 08/02/04, dated 07/30/04, repurchase value of
$106,885,201 (collateralized by: U.S. Government obligations
in a pooled cash account, total market value $109,010,460)........ 106,873,000
143,127,000 Nomura Securities International, Inc. Joint Repurchase Agreement,
1.37%, 08/02/04, dated 07/30/04, repurchase value of
$143,143,340 (collateralized by: U.S. Government obligations
in a pooled cash account, total market value $145,989,540)........ 143,127,000
-----------------
Total Repurchase Agreements - (identified cost $250,000,000)... 250,000,000
-----------------
Total Investment of Cash Collateral for
Securities Loaned - (identified cost $298,650,913)........ 298,650,913
-----------------
Total Investments - (identified cost $17,696,395,033) - (101.06%)(a).. 23,646,741,624
Liabilities Less Other Assets - (1.06%)............................... (249,173,844)
-----------------
Net Assets - (100%)............................................ $ 23,397,567,780
=================
(a) Aggregate cost for Federal income tax purposes is $17,708,787,956. At July 31, 2004
unrealized appreciation (depreciation) of securities for Federal income tax purposes was
as follows:
Unrealized appreciation............................................... $ 6,654,897,794
Unrealized depreciation............................................... (716,944,126)
-----------------
Net unrealized appreciation.................................... $ 5,937,953,668
=================
17
DAVIS NEW YORK VENTURE FUND
SCHEDULE OF INVESTMENTS - (Continued)
July 31, 2004
================================================================================
(b) Affiliated company. Represents ownership of at least 5% of the voting
securities of the issuer and is an affiliate, as defined in the Investment
Company Act of 1940, at or during the period ended July 31, 2004. The aggregate
fair value of the securities of affiliated companies held by the Fund as of July
31, 2004 amounts to $1,753,076,041. Transactions during the period in which the
issuers were affiliates are as follows:
Shares Gross Gross Shares Dividend
Security July 31, 2003 Additions Reductions July 31, 2004 Income
- -------- ------------- --------- ---------- -------------- ------
D&B Corp. 5,037,400 - 6,700 5,030,700 -
General Growth
Properites Inc. (c) 3,598,868 7,188,136 4,800 10,782,204 $ 6,328,048
Julius Baer Holding, Ltd. AG 1,283,952 - - 1,283,952 5,052,495
Martin Marietta Materials, Inc. 4,036,700 - 5,400 4,031,300 2,902,536
Sealed Air Corp. 12,599,400 - 16,900 12,582,500 -
Transatlantic Holdings, Inc. 4,973,150 1,241,613 6,700 6,208,063 2,185,238
(c) Not an affiliate as of July 31, 2004.
(d) Security is partially on loan - See Note 7 of the Notes to Financial
Statements.
* Non-Income Producing Security.
SEE NOTES TO FINANCIAL STATEMENTS
18
DAVIS NEW YORK VENTURE FUND
STATEMENT OF ASSETS AND LIABILITIES
At July 31, 2004
================================================================================
ASSETS:
Investments in securities, at value (see accompanying Schedule of
Investments):
Unaffiliated companies (including securities loaned of $279,585,279)
(cost of $15,930,912,839)........................................................ $ 21,595,014,670
Affiliated companies (cost of $1,466,831,281)................................... 1,753,076,041
Collateral for securities loaned (cost of $298,650,913) (Note 7)................. 298,650,913
Cash................................................................................. 632,776
Receivables:
Investment securities sold....................................................... 30,772,927
Capital stock sold............................................................... 54,011,879
Dividends and interest........................................................... 26,044,304
-----------------
Total assets................................................................ 23,758,203,510
-----------------
LIABILITIES:
Return of collateral for securities loaned (Note 7).................................. 298,650,913
Payables:
Capital stock redeemed........................................................... 35,123,591
Accrued expenses..................................................................... 793,169
Accrued management fee............................................................... 10,307,962
Accrued transfer agent fee........................................................... 5,179,291
Distribution and service plan fees (Note 4).......................................... 10,580,804
-----------------
Total liabilities........................................................... 360,635,730
-----------------
NET ASSETS ............................................................................... $ 23,397,567,780
=================
NET ASSETS CONSIST OF:
Par value of shares of capital stock................................................. $ 42,719,484
Additional paid-in capital........................................................... 19,692,452,132
Net unrealized appreciation on investments and translation of assets
and liabilities denominated in foreign currency.................................. 5,950,347,137
Undistributed net investment income.................................................. 46,293,019
Accumulated net realized losses from investments and foreign currency transactions... (2,334,243,992)
-----------------
Net assets.................................................................. $ 23,397,567,780
=================
19
DAVIS NEW YORK VENTURE FUND
STATEMENT OF ASSETS AND LIABILITIES - (Continued)
At July 31, 2004
==============================================================================================================
CLASS A SHARES
Net assets....................................................................... $12,867,673,713
Shares outstanding............................................................... 462,329,588
Net asset value and redemption price per share................................... $ 27.83
=========
Maximum offering price per share (100/95.25 of $27.83)*.......................... $ 29.22
=========
CLASS B SHARES
Net assets....................................................................... $ 5,267,043,381
Shares outstanding............................................................... 198,018,504
Net asset value, offering and redemption price per share......................... $ 26.60
=========
CLASS C SHARES
Net assets....................................................................... $ 3,899,007,133
Shares outstanding............................................................... 145,637,487
Net asset value, offering and redemption price per share......................... $ 26.77
=========
CLASS R SHARES
Net assets....................................................................... $ 10,170,892
Shares outstanding............................................................... 365,511
Net asset value, offering and redemption price per share......................... $ 27.83
=========
CLASS Y SHARES
Net assets....................................................................... $ 1,353,672,661
Shares outstanding............................................................... 48,038,591
Net asset value, offering and redemption price per share......................... $ 28.18
=========
*On purchases of $100,000 or more, the offering price is reduced.
SEE NOTES TO FINANCIAL STATEMENTS
20
DAVIS NEW YORK VENTURE FUND
STATEMENT OF OPERATIONS
For the year ended July 31, 2004
==============================================================================================================
INVESTMENT INCOME:
Income:
Dividends:
Unaffiliated companies (Net of foreign withholding taxes of $9,770,286)..... $ 351,446,968
Affiliated companies (Net of foreign withholding taxes of $971,442)......... 16,468,317
Interest......................................................................... 2,420,105
Lending fees..................................................................... 1,126,532
-----------------
Total income............................................................ 371,461,922
Expenses:
Management fees (Note 3)........................................ $ 112,079,463
Custodian fees.................................................. 4,115,658
Transfer agent fees
Class A.................................................... 14,307,189
Class B.................................................... 9,215,793
Class C.................................................... 5,521,120
Class R.................................................... 3,004
Class Y.................................................... 610,681
Audit fees...................................................... 86,000
Legal fees...................................................... 54,742
Accounting fees (Note 3)........................................ 399,996
Reports to shareholders......................................... 2,744,377
Directors' fees and expenses.................................... 436,389
Registration and filing fees.................................... 420,178
Miscellaneous................................................... 247,031
Payments under distribution plan (Note 4)
Class A.................................................... 28,919,787
Class B.................................................... 53,783,747
Class C.................................................... 36,704,634
Class R.................................................... 15,212
---------------
Total expenses.......................................................... 269,665,001
Expenses paid indirectly (Note 6)...................................... (269,270)
-----------------
Net expenses............................................................ 269,395,731
-----------------
Net investment income............................................... 102,066,191
-----------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) from:
Investment transactions:
Unaffiliated companies...................................................... (296,869,589)
Affiliated companies........................................................ 224,358
Foreign currency transactions.................................................... (1,388,582)
Payments by affiliates (Note 9).................................................. 2,246,097
Net increase in unrealized appreciation on investments and translation
of assets and liabilities in foreign currencies.................................. 3,510,030,767
-----------------
Net realized and unrealized gain on investments, foreign currency, and payments
by affiliates.................................................................... 3,214,243,051
-----------------
Net increase in net assets resulting from operations.................... $ 3,316,309,242
=================
SEE NOTES TO FINANCIAL STATEMENTS
21
DAVIS NEW YORK VENTURE FUND
STATEMENTS OF CHANGES IN NET ASSETS
================================================================================================================
YEAR ENDED YEAR ENDED
JULY 31, JULY 31,
2004 2003
---- ----
OPERATIONS:
Net investment income............................................. $ 102,066,191 $ 86,683,154
Net realized loss from investments, foreign currency
transactions, and payments by affiliates...................... (295,787,716) (919,831,317)
Net change in unrealized appreciation (depreciation) on
investments and translation of assets and liabilities in
foreign currencies............................................ 3,510,030,767 2,608,653,680
----------------- -----------------
Net increase in net assets resulting from operations............ 3,316,309,242 1,775,505,517
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income:
Class A ..................................................... (76,851,585) (51,438,816)
Class B ..................................................... (105,899) -
Class C ..................................................... (971,079) -
Class R ..................................................... (704) -
Class Y ..................................................... (11,439,720) (8,290,743)
CAPITAL SHARE TRANSACTIONS:
Net increase (decrease) in net assets resulting from capital share
transactions (Note 5)
Class A ..................................................... 1,611,115,087 (50,207,398)
Class B ..................................................... (485,819,542) (399,948,249)
Class C ..................................................... 239,007,177 (162,445,531)
Class R ..................................................... 10,409,126 -
Class Y ..................................................... 118,495,019 15,913,146
----------------- -----------------
Total increase in net assets...................................... 4,720,147,122 1,119,087,926
NET ASSETS:
Beginning of year................................................. 18,677,420,658 17,558,332,732
----------------- -----------------
End of year*...................................................... $ 23,397,567,780 $ 18,677,420,658
================= =================
*Including undistributed net investment income of............... $ 46,293,019 $ 34,984,397
SEE NOTES TO FINANCIAL STATEMENTS
22
DAVIS NEW YORK VENTURE FUND
NOTES TO FINANCIAL STATEMENTS
July 31, 2004
================================================================================
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Fund is a separate series of Davis New York Venture Fund, Inc., which
is registered under the Investment Company Act of 1940, as amended, as a
diversified, open-end management investment company. The Fund's investment
objective is growth of capital. The Fund offers shares in five classes, Class A,
Class B, Class C, Class R, and Class Y. The Class A shares are sold with a
front-end sales charge and the Class B and Class C shares are sold at net asset
value and may be subject to a contingent deferred sales charge upon redemption.
Class R and Class Y shares are sold at net asset value and are not subject to
any contingent deferred sales charge. Class R shares generally are available
only to retirement and benefit plans. Class Y shares are only available to
certain qualified investors. Class R shares were first offered on August 20,
2003. Income, expenses (other than those attributable to a specific class), and
gains and losses are allocated daily to each class of shares based upon the
relative proportion of net assets represented by each class. Operating expenses
directly attributable to a specific class, such as distribution and transfer
agent fees, are charged against the operations of that class. All classes have
identical rights with respect to voting (exclusive of each Class's distribution
arrangement), liquidation, and distributions. The following is a summary of
significant accounting policies followed by the Fund in the preparation of its
financial statements.
SECURITY VALUATION - Portfolio securities listed on national securities
exchanges are valued at the last reported sales price on the day of valuation.
Securities traded in the over the counter market and listed securities for which
no sale was reported on that date are stated at the average of closing bid and
asked prices. Securities for which market quotations are not readily available,
or whose values have been affected by a significant event occurring after the
close of their primary markets, are valued at fair value as determined in good
faith by the Board of Directors. Short-term obligations are valued at amortized
cost, which approximates fair value. The valuation procedures are reviewed and
subject to approval by the Board of Directors.
MASTER REPURCHASE AGREEMENTS - The Fund, along with other affiliated funds, may
transfer uninvested cash balances into one or more master repurchase agreement
accounts. These balances are invested in one or more repurchase agreements,
secured by U.S. government securities. Securities pledged as collateral for
repurchase agreements are held by a custodian bank until the agreements mature.
Each agreement requires that the market value of the collateral be sufficient to
cover payments of interest and principal; however, in the event of default by
the other party to the agreement, retention of the collateral may be subject to
legal proceedings.
CURRENCY TRANSLATION - The market values of all assets and liabilities
denominated in foreign currencies are recorded in the financial statements after
translation to the U.S. dollar based upon the mean between the bid and offered
quotations of the currencies against U.S. dollars on the date of valuation. The
cost basis of such assets and liabilities is determined based upon historical
exchange rates. Income and expenses are translated at average exchange rates in
effect as accrued or incurred.
FOREIGN CURRENCY - The Fund may enter into forward purchases or sales of foreign
currencies to hedge certain foreign currency denominated assets and liabilities
against declines in market value relative to the U.S. dollar. Forward currency
contracts are marked-to-market daily and the change in market value is recorded
by the Fund as an unrealized gain or loss. When the forward currency contract is
closed, the Fund records a realized gain or loss equal to the difference between
the value of the forward currency contract at the time it was opened and value
at the time it was closed. Investments in forward currency contracts may expose
the Fund to risks resulting from unanticipated movements in foreign currency
exchange rates or failure of the counter-party to the agreement to perform in
accordance with the terms of the contract.
23
DAVIS NEW YORK VENTURE FUND
NOTES TO FINANCIAL STATEMENTS - (Continued)
July 31, 2004
================================================================================
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED)
Reported net realized foreign exchange gains or losses arise from sales and
maturities of investments, sales of foreign currencies, currency gains or losses
realized between the trade and settlement dates on securities transactions, the
difference between the amounts of dividends, interest and foreign withholding
taxes recorded on the Fund's books, and the U.S. dollar equivalent of the
amounts actually received or paid. Net unrealized foreign exchange gains and
losses arise from changes in the value of assets and liabilities other than
investments in securities at fiscal year end, resulting from changes in the
exchange rate. The Fund includes foreign currency gains and losses realized on
the sale of investments together with market gains and losses on such
investments in the statement of operations.
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 substantially all of its taxable income, including any net realized
gains on investments not offset by loss carryovers, to shareholders. Therefore,
no provision for federal income or excise tax is required. At July 31, 2004 the
Fund had available for Federal income tax purposes unused capital loss
carryovers of $2,041,249,000 of which $4,237,000 expires in 2009, $458,003,000
expires in 2010, $1,141,176,000 expires in 2011, and $437,833,000 expires in
2012. In addition, at July 31, 2004, the Fund had approximately $280,833,000 of
post October 2003 losses available to offset future capital gains, if any, which
expire in 2013.
SECURITIES TRANSACTIONS AND RELATED INVESTMENT INCOME - Securities transactions
are accounted for on the trade date (date the order to buy or sell is executed)
with realized gain or loss on the sale of securities being determined based upon
identified cost. Dividend income is recorded on the ex-dividend date. Interest
income, which includes accretion of discount and amortization of premium, is
accrued as earned.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS - Dividends and distributions to
shareholders are recorded on the ex-dividend date. Net investment income (loss),
net realized gains (losses) and net unrealized appreciation (depreciation) of
investments may differ for financial statement and tax purposes primarily
because of the recognition of certain foreign currency gains (losses) as
ordinary income (loss) for tax purposes and the tax deferral of losses on "wash
sale" transactions. The character of dividends and distributions made during the
fiscal year from net investment income and net realized securities gains may
differ from their ultimate characterization for Federal income tax purposes.
Also, due to the timing of dividends and distributions, the fiscal year in which
amounts are distributed may differ from the fiscal year in which income or
realized gain was recorded by the Fund. The Fund adjusts the classification of
distributions to shareholders to reflect the differences between financial
statement amounts and distributions determined in accordance with income tax
regulations. Accordingly, during the year ended July 31, 2004, amounts have been
reclassified to reflect a decrease in undistributed net investment income of
$1,388,582, an increase in accumulated net realized loss of $7,238,625, a
decrease in unrealized appreciation of $843,936, and an increase in paid in
capital of $9,471,143. Net assets have not been affected by this
reclassification.
The tax character of distributions paid during the years ended July 31, 2004 and
2003, was as follows:
2004 2003
------------------ --------------------
Ordinary income............ $ 89,368,987 $ 59,729,559
24
DAVIS NEW YORK VENTURE FUND
NOTES TO FINANCIAL STATEMENTS - (Continued)
July 31, 2004
================================================================================
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED)
As of July 31, 2004, the components of distributable earnings (accumulated
losses) on a tax basis were as follows:
Undistributed net investment income................... $ 46,523,854
Accumulated net realized losses from investments and
foreign currency transactions................... (2,322,081,905)
Net unrealized appreciation on investments and
foreign currency transactions................... 5,937,954,215
---------------
Total.............................................. $ 3,662,396,164
===============
USE OF ESTIMATES IN FINANCIAL STATEMENTS - In preparing financial statements in
conformity with accounting principles generally accepted in the United States of
America, management makes 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, as well as the reported
amounts of income and expenses during the reporting period. Actual results may
differ from these estimates.
NOTE 2 - PURCHASES AND SALES OF SECURITIES
Purchases and sales of investment securities (excluding short-term
securities) for the year ended July 31, 2004, were $2,981,935,819 and
$1,192,979,403, respectively.
NOTE 3 - INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Advisory fees are paid monthly to Davis Advisors (the "Adviser"), the
Fund's investment adviser. Until April 1, 2004, the annual rate was 0.75% of the
average net assets for the first $250 million, 0.65% of the average net assets
on the next $250 million, 0.55% of the average net assets on the next $2.5
billion, 0.54% of the average net assets on the next $1 billion, 0.53% of the
average net assets on the next $1 billion, 0.52% of the average net assets on
the next $1 billion, 0.51% of the average net assets on the next $1 billion, and
0.50% of the average net assets in excess of $7 billion. Effective April 1,
2004, the Advisory fee was changed from 0.50% of the average net assets in
excess of $7 billion to 0.50% of the average net assets on the next $3 billion,
0.485% of the average net assets on the next $8 billion and 0.47% of the average
net assets in excess of $18 billion. Management fees paid during the year ended
July 31, 2004, approximated 0.51% of average net assets.
The Adviser was paid for registering Fund shares for sale in various
states. The fee for the nine months ended April 30, 2004, amounted to $10,503.
Effective May 1, 2004, the Adviser is no longer being paid for registering fund
shares; the Fund is paying an independent third party to provide these services.
State Street Bank & Trust Co. ("State Street Bank") is the Fund's primary
transfer agent. The Adviser is also paid for certain transfer agent services.
The fee for these services for the year ended July 31, 2004, amounted to
$2,012,053. State Street Bank is the Fund's primary accounting provider. Fees
for such services are included in the custodian fee as State Street Bank also
serves as the Fund's custodian. The Adviser is also paid for certain accounting
services. The fee amounted to $399,996 for the year ended July 31, 2004. Certain
directors and the officers of the Fund are also directors and officers of the
general partner of the Adviser.
25
DAVIS NEW YORK VENTURE FUND
NOTES TO FINANCIAL STATEMENTS - (Continued)
July 31, 2004
================================================================================
NOTE 3 - INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES -
(CONTINUED)
Davis Selected Advisers-NY, Inc. ("DSA-NY"), a wholly-owned subsidiary of
the Adviser, acts as sub-adviser to the Fund. DSA-NY performs research and
portfolio management services for the Fund under a Sub-Advisory Agreement with
the Adviser. The Fund pays no fees directly to DSA-NY.
NOTE 4 - DISTRIBUTION AND UNDERWRITING FEES
CLASS A SHARES
Class A shares of the Fund are sold at net asset value plus a sales charge
and are redeemed at net asset value.
During the year ended July 31, 2004, Davis Distributors, LLC, the Fund's
Underwriter (the "Underwriter" or "Distributor") received $12,907,676 from
commissions earned on sales of Class A shares of the Fund, of which $1,979,473
was retained by the Underwriter and the remaining $10,928,203 was reallowed to
investment dealers. The Underwriter paid the costs of prospectuses in excess of
those required to be filed as part of the Fund's registration statement, sales
literature and other expenses assumed or incurred by it in connection with such
sales.
The Underwriter is reimbursed for amounts paid to dealers as a service fee
or commissions with respect to Class A shares sold by dealers which remain
outstanding during the period. The service fee is paid at an annual rate up to
1/4 of 1% of the average net assets maintained by the responsible dealers. The
Underwriter is not reimbursed for accounts for which the Underwriter pays no
service fees to other firms. The service fee for Class A shares of the Fund for
the year ended July 31, 2004, was $28,919,787.
CLASS B SHARES
Class B shares of the Fund are sold at net asset value and are redeemed at
net asset value less a contingent deferred sales charge if redeemed within six
years of purchase.
The Fund pays a distribution fee to reimburse the Distributor for
commission advances on the sale of the Fund's Class B shares. Payments under the
Class B Distribution Plan are limited to an annual rate of equal to the lesser
of 1.25% of the average daily net asset value of the Class B shares or the
maximum amount provided by applicable rule or regulation of the National
Association of Securities Dealers, Inc., ("NASD"), which currently is 1.00%.
Therefore, the effective rate of the Class B Distribution Plan is currently 1%,
of which 0.75% may be used to pay distribution expenses and 0.25% may be used to
pay shareholder service fees. The NASD rule also limits the aggregate amount the
Fund may pay for distribution to 6.25% of gross Fund sales since inception of
the Rule 12b-1 plan, plus interest, at 1% over the prime rate on unpaid amounts.
The Distributor intends to seek full payment (plus interest at prime plus 1%) of
distribution charges that exceed the 1% annual limit in some future period or
periods when the plan limits have not been reached.
26
DAVIS NEW YORK VENTURE FUND
NOTES TO FINANCIAL STATEMENTS - (Continued)
July 31, 2004
================================================================================
NOTE 4 - DISTRIBUTION AND UNDERWRITING FEES - (CONTINUED)
CLASS B SHARES - (CONTINUED)
During the year ended July 31, 2004, Class B shares of the Fund made
distribution plan payments which included distribution fees of $40,365,336 and
service fees of $13,418,411.
Commission advances by the Distributor during the year ended July 31, 2004
on the sale of Class B shares of the Fund amounted to $11,367,489, all of which
was reallowed to qualified selling dealers.
The Distributor intends to seek payment from Class B shares of the Fund in
the amount of $323,309,222 representing the cumulative commission advances by
the Distributor on the sale of the Fund's Class B shares, plus interest, reduced
by cumulative distribution fees paid by the Fund and cumulative contingent
deferred sales charges paid by redeeming shareholders. The Fund has no
contractual obligation to pay any such distribution charges and the amount, if
any, timing and condition of such payment are solely within the discretion of
the Directors who are not interested persons of the Fund or the Distributor.
A contingent deferred sales charge is imposed upon redemption of certain
Class B shares of the Fund within six years of the original purchase. The charge
is a declining percentage starting at 4% of the lesser of net asset value of the
shares redeemed or the total cost of such shares. During the year ended July 31,
2004 the Distributor received $7,182,411 in contingent deferred sales charges
from Class B shares of the Fund.
CLASS C SHARES
Class C shares of the Fund are sold at net asset value and are redeemed at
net asset value less a contingent deferred sales charge of 1% if redeemed within
one year of purchase. Payments under the Class C Distribution Plan are limited
to an annual rate of equal to the lesser of 1.25% of the average daily net asset
value of the Class C shares or the maximum amount provided by applicable rule or
regulation of the National Association of Securities Dealers, Inc., ("NASD"),
which currently is 1.00%. Therefore, the effective rate of the Class C
Distribution Plan is currently 1%, of which 0.75% may be used to pay
distribution expenses and 0.25% may be used to pay shareholder service fees.
Class C shares are subject to the same 6.25% and 1% limitations applicable to
the Class B Distribution Plan.
During the year ended July 31, 2004, Class C shares of the Fund made
distribution plan payments which included distribution fees of $27,528,476 and
service fees of $9,176,158. During the year ended July 31, 2004, the Distributor
received $241,959 in contingent deferred sales charges from Class C shares of
the Fund.
27
DAVIS NEW YORK VENTURE FUND
NOTES TO FINANCIAL STATEMENTS - (Continued)
July 31, 2004
================================================================================
NOTE 4 - DISTRIBUTION AND UNDERWRITING FEES - (CONTINUED)
CLASS R SHARES
Class R shares of the Fund are sold and redeemed at net asset value.
Payments under the Class R Distribution Plan are limited to an annual rate of
0.75% of the average daily net asset value of the Class R shares or the maximum
amount provided by applicable rule or regulation of the National Association of
Securities Dealers, Inc., ("NASD"), which currently is 1.00%. The effective rate
of the Class R Distribution Plan is currently 0.50%, of which 0.25% may be used
to pay distribution expenses and 0.25% may be used to pay shareholder service
fees. Class R shares are subject to the same 6.25% and 1% limitations applicable
to the Class B Distribution Plan.
During the year ended July 31, 2004, Class R shares of the Fund made
distribution plan payments which included distribution fees and service fees of
$7,606 for each.
NOTE 5 - CAPITAL STOCK
At July 31, 2004, there were 3,000,000,000 shares of capital stock ($0.05
par value per share) authorized, 2,125,000,000 of which shares are classified as
Davis New York Venture Fund. Transactions in capital stock were as follows:
CLASS A
YEAR ENDED YEAR ENDED
JULY 31, 2004 JULY 31, 2003
------------------------------- --------------------------------
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------
Shares subscribed.............................. 129,537,957 $ 3,537,315,624 92,183,809 $ 1,974,936,758
Shares issued in reinvestment of distributions. 2,700,189 71,365,847 2,190,121 47,658,573
------------- --------------- ------------ ---------------
132,238,146 3,608,681,471 94,373,930 2,022,595,331
Shares redeemed................................ (73,663,816) (1,997,566,384) (97,458,707) (2,072,802,729)
------------- --------------- ------------ ---------------
Net increase (decrease)................... 58,574,330 $ 1,611,115,087 (3,084,777) $ (50,207,398)
============= =============== ============ ===============
CLASS B
YEAR ENDED YEAR ENDED
JULY 31, 2004 JULY 31, 2003
------------------------------- --------------------------------
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------
Shares subscribed.............................. 17,255,350 $ 445,891,461 20,018,221 $ 412,302,792
Shares issued in reinvestment of distributions. 3,859 97,967 - -
------------- ------------- ------------ -------------
17,259,209 445,989,428 20,018,221 412,302,792
Shares redeemed................................ (35,819,817) (931,808,970) (40,242,089) (812,251,041)
------------- ------------- ------------ -------------
Net decrease.............................. (18,560,608) $(485,819,542) (20,223,868) $(399,948,249)
============= ============= ============ =============
28
DAVIS NEW YORK VENTURE FUND
NOTES TO FINANCIAL STATEMENTS - (Continued)
July 31, 2004
================================================================================
NOTE 5 - CAPITAL STOCK - (CONTINUED)
CLASS C
YEAR ENDED YEAR ENDED
JULY 31, 2004 JULY 31, 2003
------------------------------- --------------------------------
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------
Shares subscribed.............................. 27,305,099 $ 717,037,581 17,491,329 $ 363,379,899
Shares issued in reinvestment of distributions. 35,030 895,031 - -
------------- ------------- ------------ -------------
27,340,129 717,932,612 17,491,329 363,379,899
Shares redeemed................................ (18,332,071) (478,925,435) (25,926,091) (525,825,430)
------------- ------------- ------------ -------------
Net increase (decrease)................... 9,008,058 $ 239,007,177 (8,434,762) $(162,445,531)
============= ============= ============= =============
CLASS R
AUGUST 20, 2003
(INCEPTION OF CLASS)
THROUGH
JULY 31, 2004
SHARES AMOUNT
------- ------
Shares subscribed..................................... 381,213 $ 10,854,447
Shares issued in reinvestment of distributions ....... 27 704
-------- ------------
381,240 10,855,151
Shares redeemed....................................... (15,729) (446,025)
Net increase.......................................... 365,511 $ 10,409,126
======== ============
CLASS Y
YEAR ENDED YEAR ENDED
JULY 31, 2004 JULY 31, 2003
------------------------------- --------------------------------
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------
Shares subscribed.............................. 15,287,681 $ 426,257,699 11,142,227 $ 243,635,236
Shares issued in reinvestment of distributions. 328,341 8,766,699 282,403 6,204,391
------------- ------------- ------------ -------------
15,616,022 435,024,398 11,424,630 249,839,627
Shares redeemed................................ (11,605,390) (316,529,379) (10,959,782) (233,926,481)
------------- ------------- ----------- -------------
Net increase.............................. 4,010,632 $ 118,495,019 464,848 $ 15,913,146
============= ============= ============ =============
NOTE 6 - EXPENSES PAID INDIRECTLY
Under an agreement with the custodian bank, custodian fees are reduced for
earnings on cash balances maintained at the custodian by the Fund. Such
reductions amounted to $2,891 during the year ended July 31, 2004.
Davis New York Venture Fund ("the Fund") has entered into agreements with
certain brokers whereby the Fund's operating expenses are reduced by a portion
of the commissions paid to such brokers. Portfolio transactions are allocated to
these brokers only when the Fund's traders make a good faith determination that
such brokers can achieve best execution, not withstanding the operating expense
reductions. During the year ended July 31, 2004 the reduction amounted to
$266,379.
29
DAVIS NEW YORK VENTURE FUND
NOTES TO FINANCIAL STATEMENTS - (Continued)
July 31, 2004
================================================================================
NOTE 7 - SECURITIES LOANED
Davis New York Venture Fund (the "Fund") has entered into a securities
lending arrangement with UBS Financial Services, Inc. Under the terms of the
agreement, the Fund receives fee income from lending transactions; in exchange
for such fees, UBS Financial Services, Inc. is authorized to loan securities on
behalf of the Fund, against receipt of collateral at least equal to the value of
the securities loaned. As of July 31, 2004, the Fund had on loan securities
valued at $279,585,279; cash of $298,650,913 was received as collateral for the
loans, of which $250,000,000 or 84% and $48,650,913 or 16% of the collateral has
been invested by the Adviser in Repurchase Agreements and Money Market
Instruments, respectively. The Fund bears the risk of any deficiency in the
amount of the collateral available for return to a borrower due to a loss in an
approved investment.
NOTE 8 - BANK BORROWINGS
The Fund may borrow up to 5% of its assets from a bank to purchase portfolio
securities, or for temporary and emergency purposes. The purchase of securities
with borrowed funds creates leverage in the Fund. The Fund has entered into an
agreement, which enables it to participate with certain other funds managed by
the Adviser in an unsecured line of credit with a bank, which permits borrowings
up to $50 million, collectively. Interest is charged based on its borrowings, at
a rate equal to the overnight Federal Funds Rate plus 0.75%. The Fund had no
borrowings outstanding for the year ended July 31, 2004.
NOTE 9 - PAYMENTS BY AFFILIATES
The Adviser reimbursed the Fund for commissions paid to certain broker dealers
which received brokerage which was directed for sale of fund shares from January
1, 2000 to July 31, 2003. The amount paid to the Fund was $2,246,097.
NOTE 10 - LITIGATION MATTERS
On June 2, 2004, a proposed class action lawsuit was filed in the United
States District Court for the Southern District of New York on behalf of
investors in certain mutual funds ("Funds") managed by Davis Selected Advisers
L.P. ("Davis Advisors") including the Davis New York Venture Fund. The
plaintiffs claim that Davis Advisors and its affiliates, and the individual
directors of the Funds (collectively the "Defendants") used Fund assets to pay
brokers to market the Funds and that the Defendants disguised such payments as
brokerage commissions and further failed to disclose such payments in public
filings or elsewhere. The lawsuit seeks damages of unspecified amounts. Three
substantially identical proposed class action lawsuits were filed against the
Defendants later in June and July 2004 in the United States Court for the
Southern District of New York. Davis Advisors believes the actions are without
merit and the Defendants intend to vigorously defend the proceedings. Although
no determination can be made at this time, the Fund does not expect this lawsuit
to have a material adverse effect on the assets or results of the Fund.
30
DAVIS NEW YORK VENTURE FUND
FINANCIAL HIGHLIGHTS
CLASS A
================================================================================
Financial Highlights for a share of capital stock outstanding throughout each
period.
YEAR ENDED JULY 31,
--------------------------------------------------------
2004 2003 2002 2001 2000
---- ---- ---- ---- ----
Net Asset Value, Beginning of Period............ $ 23.73 $ 21.47 $ 25.99 $ 30.64 $ 27.73
------- ------- ------- ------- -------
Income (Loss) From Investment Operations
Net Investment Income...................... .17 .18 .12 .11 .08
Net Realized and Unrealized Gains (Losses). 4.12 2.21 (4.61) (2.07) 3.45
------- ------- ------- ------- -------
Total From Investment Operations......... 4.29 2.39 (4.49) (1.96) 3.53
Dividends and Distributions
Dividends from Net Investment Income....... (.19) (.13) (.03) (.04) -(3)
Distributions in Excess of Net Investment
Income.................................. - - - (.01) -
Distributions from Realized Gains.......... - - - (2.64) (.62)
------- ------- ------- ------- -------
Total Dividends and Distributions........ (.19) (.13) (.03) (2.69) (.62)
------- ------- ------- ------- -------
Net Asset Value, End of Period.................. $ 27.83 $ 23.73 $ 21.47 $ 25.99 $ 30.64
======= ======= ======= ======= =======
Total Return(1)................................. 18.10% 11.19% (17.29)% (6.70)% 12.99%
Ratios/Supplemental Data
Net Assets, End of Period (000,000 omitted) $12,868 $9,581 $8,734 $10,678 $9,539
Ratio of Expenses to Average Net Assets.... .92% .95% .92% .89% .88%
Ratio of Net Investment Income to Average
Net Assets............................... .77% .85% .49% .50% .31%
Portfolio Turnover Rate(2)................. 6% 10% 22% 15% 29%
(1) Assumes hypothetical initial investment on the business day before the
first day of the fiscal period, with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at
the net asset value calculated on the last business day of the fiscal
period. Sales charges are not reflected in the total returns.
(2) The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities
owned during the period. Securities with a maturity or expiration date at
the time of acquisition of one year or less are excluded from the
calculation.
(3) Less than $0.005 per share.
SEE NOTES TO FINANCIAL STATEMENTS
31
DAVIS NEW YORK VENTURE FUND
FINANCIAL HIGHLIGHTS
CLASS B
================================================================================
Financial Highlights for a share of capital stock outstanding throughout each
period.
YEAR ENDED JULY 31,
-------------------------------------------------------
2004 2003 2002 2001 2000
---- ---- ---- ---- ----
Net Asset Value, Beginning of Period............. $ 22.70 $ 20.58 $ 25.09 $ 29.85 $ 27.25
------- ------- ------- ------- -------
Income (Loss) From Investment Operations
Net Investment Income (Loss)................ (.02)(4) .01(4) (.09) (.03) (.23)
Net Realized and Unrealized Gains (Losses).. 3.92 2.11 (4.42) (2.09) 3.45
------- ------- ------- ------- -------
Total From Investment Operations.......... 3.90 2.12 (4.51) (2.12) 3.22
Dividends and Distributions
Dividends from Net Investment Income........ -(3) - - - -
Distributions from Realized Gains........... - - - (2.64) (.62)
------- ------- ------- ------- -------
Total Dividends and Distributions......... -(3) - - (2.64) (.62)
------- ------- ------- ------- -------
Net Asset Value, End of Period................... $ 26.60 $ 22.70 $ 20.58 $ 25.09 $ 29.85
======= ======= ======= ======= =======
Total Return(1).................................. 17.18% 10.30% (17.98)% (7.46)% 12.06%
Ratios/Supplemental Data
Net Assets, End of Period (000,000 omitted). $5,267 $4,917 $4,874 $6,303 $5,724
Ratio of Expenses to Average Net Assets..... 1.73% 1.77% 1.72% 1.71% 1.71%
Ratio of Net Investment Income (Loss) to
Average Net Assets........................ (.04)% .03% (.31)% (.32)% (.52)%
Portfolio Turnover Rate(2).................. 6% 10% 22% 15% 29%
(1) Assumes hypothetical initial investment on the business day before the
first day of the fiscal period, with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at
the net asset value calculated on the last business day of the fiscal
period. Sales charges are not reflected in the total returns.
(2) The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities
owned during the period. Securities with a maturity or expiration date at
the time of acquisition of one year or less are excluded from the
calculation.
(3) Less than $0.005 per share.
(4) Per share calculations were based on average shares outstanding for the
period.
SEE NOTES TO FINANCIAL STATEMENTS
32
DAVIS NEW YORK VENTURE FUND
FINANCIAL HIGHLIGHTS
CLASS C
================================================================================
Financial Highlights for a share of capital stock outstanding throughout each
period.
YEAR ENDED JULY 31,
------------------------------------------------------
2004 2003 2002 2001 2000
---- ---- ---- ---- ----
Net Asset Value, Beginning of Period............. $ 22.85 $ 20.71 $ 25.24 $ 30.00 $ 27.38
------- ------- ------- ------- -------
Income (Loss) From Investment Operations
Net Investment Income (Loss)................ - (3,4) - (3) (.08) (.02) (.21)
Net Realized and Unrealized Gains (Losses).. 3.93 2.14 (4.45) (2.10) 3.45
------- ------- ------- ------- -------
Total From Investment Operations.......... 3.93 2.14 (4.53) (2.12) 3.24
Dividends and Distributions
Dividends from Net Investment Income........ (.01) - - - -
Distributions from Realized Gains........... - - - (2.64) (.62)
------- ------- ------- ------- -------
Total Dividends and Distributions......... (.01) - - (2.64) (.62)
------- ------- ------- ------- -------
Net Asset Value, End of Period................... $ 26.77 $ 22.85 $ 20.71 $ 25.24 $ 30.00
======= ======= ======= ======= =======
Total Return(1).................................. 17.19% 10.33% (17.95)% (7.42)% 12.07%
Ratios/Supplemental Data
Net Assets, End of Period (000,000 omitted). $3,899 $3,122 $3,004 $3,825 $3,021
Ratio of Expenses to Average Net Assets..... 1.70% 1.74% 1.70% 1.68% 1.69%
Ratio of Net Investment Income (Loss) to
Average Net Assets........................ (.01)% .06% (.29)% (.29)% (.50)%
Portfolio Turnover Rate(2)................. 6% 10% 22% 15% 29%
(1) Assumes hypothetical initial investment on the business day before the
first day of the fiscal period, with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at
the net asset value calculated on the last business day of the fiscal
period. Sales charges are not reflected in the total returns.
(2) The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities
owned during the period. Securities with a maturity or expiration date at
the time of acquisition of one year or less are excluded from the
calculation.
(3) Less than $0.005 per share.
(4) Per share calculations were based on average shares outstanding for the
period.
SEE NOTES TO FINANCIAL STATEMENTS
33
DAVIS NEW YORK VENTURE FUND
FINANCIAL HIGHLIGHTS
CLASS R
================================================================================
Financial Highlights for a share of capital stock outstanding throughout each
period.
AUGUST 20, 2003
(INCEPTION
OF CLASS)
THROUGH
JULY 31,
2004
--------
Net Asset Value, Beginning of Period............... $ 23.98
-------
Income From Investment Operations
Net Investment Income......................... .13(3)
Net Realized and Unrealized Gains ............ 3.86
-------
Total From Investment Operations............ 3.99
Dividends and Distributions
Dividends from Net Investment Income.......... (.14)
-------
Total Dividends and Distributions........... (.14)
-------
Net Asset Value, End of Period..................... $ 27.83
=======
Total Return(1).................................... 16.67%
Ratios/Supplemental Data
Net Assets, End of Period (000,000 omitted)... $10
Ratio of Expenses to Average Net Assets....... 1.15%*
Ratio of Net Investment Income to Average Net
Assets...................................... .51%*
Portfolio Turnover Rate(2).................... 6%
(1) Assumes hypothetical initial investment on the business day before the
first day of the fiscal period (or inception of offering), with all
dividends and distributions reinvested in additional shares on the
reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in
the total returns. Total returns are not annualized for periods of less
than one full year.
(2) The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities
owned during the period. Securities with a maturity or expiration date at
the time of acquisition of one year or less are excluded from the
calculation.
(3) Per share calculations were based on average shares outstanding for the
period.
* Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
34
DAVIS NEW YORK VENTURE FUND
FINANCIAL HIGHLIGHTS
CLASS Y
================================================================================
Financial Highlights for a share of capital stock outstanding throughout each
period.
YEAR ENDED JULY 31,
------------------------------------------------------
2004 2003 2002 2001 2000
---- ---- ---- ---- ----
Net Asset Value, Beginning of Period............ $ 24.01 $ 21.72 $ 26.29 $ 30.96 $ 28.00
------- ------- ------- ------- -------
Income (Loss) From Investment Operations
Net Investment Income...................... .28 .25 .26 .13 .20
Net Realized and Unrealized Gains (Losses). 4.16 2.24 (4.73) (2.02) 3.45
------- ------- ------- ------- -------
Total From Investment Operations......... 4.44 2.49 (4.47) (1.89) 3.65
Dividends and Distributions
Dividends from Net Investment Income....... (.27) (.20) (.10) (.12) (.07)
Distributions in Excess of Net Investment - - - (.02) -
Income..........................................
Distributions from Realized Gains.......... - - - (2.64) (.62)
------- ------- ------- ------- -------
Total Dividends and Distributions........ (.27) (.20) (.10) (2.78) (.69)
------- ------- ------- ------- -------
Net Asset Value, End of Period.................. $ 28.18 $ 24.01 $ 21.72 $ 26.29 $ 30.96
======= ======= ======= ======= =======
Total Return(1)................................. 18.53% 11.53% (17.04)% (6.41)% 13.33%
Ratios/Supplemental Data
Net Assets, End of Period (000,000 omitted) $1,354 $1,057 $946 $1,465 $1,005
Ratio of Expenses to Average Net Assets.... .58% .61% .62% .62% .60%
Ratio of Net Investment Income to Average
Net Assets............................... 1.11% 1.19% .79% .77% .59%
Portfolio Turnover Rate(2)................. 6% 10% 22% 15% 29%
(1) Assumes hypothetical initial investment on the business day before the
first day of the fiscal period, with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at
the net asset value calculated on the last business day of the fiscal
period. Sales charges are not reflected in the total returns.
(2) The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities
owned during the period. Securities with a maturity or expiration date at
the time of acquisition of one year or less are excluded from the
calculation.
SEE NOTES TO FINANCIAL STATEMENTS
35
DAVIS NEW YORK VENTURE FUND
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
- --------------------------------------------------------------------------------
TO THE SHAREHOLDERS AND BOARD OF DIRECTORS
OF DAVIS NEW YORK VENTURE FUND, INC.:
We have audited the accompanying statement of assets and liabilities of
Davis New York Venture Fund (a series of Davis New York Venture Fund, Inc.),
including the schedule of investments, as of July 31, 2004, and the related
statement of operations for the year then ended, the statements of changes in
net assets for each of the two years in the period then ended, and the financial
highlights for each of the five years in the period then ended. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of July 31, 2004, by correspondence with the
custodian. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Davis New York Venture Fund as of July 31, 2004, the results of its operations
for the year then ended, the changes in its net assets for each of the two years
in the period then ended, and the financial highlights for each of the five
years in the period then ended, in conformity with U.S. generally accepted
accounting principles.
/s/ KPMG LLP
Denver, Colorado
September 10, 2004
36
DAVIS NEW YORK VENTURE FUND
FOR THE YEAR ENDED JULY 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
FEDERAL INCOME TAX INFORMATION
In early 2005, shareholders will receive information regarding all
dividends and distributions paid to them by the Fund during calendar year 2004.
Regulations of the U.S. Treasury Department require the Fund to report this
information to the Internal Revenue Service.
During the fiscal year ended July 31, 2004, $89,368,988 of dividends paid
by the Fund constituted income dividends for Federal income tax purposes.
Dividends paid by the Fund during the fiscal year ended July 31, 2004 which
are not designated as capital gain distribution should be multiplied by 100% to
arrive at the net amount eligible for the corporate dividends-received
deduction.
For the fiscal year ended July 31, 2004, certain dividends paid by the Fund
constitute qualified dividend income for Federal income tax purposes. The Fund
designates $89,368,988 as qualified dividend income.
The foregoing information is presented to assist shareholders in reporting
distributions received from the Fund to the Internal Revenue Service. Because of
the complexity of the federal regulations which may affect your individual tax
return and the many variations in state and local tax regulations, we recommend
that you consult your tax adviser for specific guidance.
PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES
The Fund has adopted Portfolio Proxy Voting Policies and Procedures under
which the Fund votes proxies relating to securities held by the Fund. A
description of the Fund's Portfolio Proxy Voting Policies and Procedures is
available (i) without charge, upon request, by calling the Fund toll-free at
1-800-279-2279, (ii) on the Fund's website at www.davisfunds.com, and (iii) on
the SEC's website at www.sec.gov.
In addition, the Fund is required to file Form N-PX, with its complete
proxy voting record for the 12 months ended June 30th, no later than August 31st
of each year. The Fund's Form N-PX filing is available (i) without charge, upon
request, by calling the Fund toll-free at 1-800-279-2279, (ii) on the Fund's
website at www.davisfunds.com, and (iii) on the SEC's website at www.sec.gov.
FORM N-Q
The Fund files its complete schedule of portfolio holdings with the SEC for
the first and third quarters of each fiscal year on Form N-Q. The Fund's Form
N-Q is available without charge upon request by calling 1-800-279-2279 or on the
fund's website at www.davisfunds.com or on the SEC's website at www.sec.gov. The
Fund's Form N-Q may be reviewed and copied at the SEC's Public Reference Room in
Washington, DC, and that information on the operation of the Public Reference
Room may be obtained by calling 1-800-SEC-0330.
37
DAVIS NEW YORK VENTURE FUND
2949 East Elvira Road, Suite 101
Tucson, Arizona 85706
================================================================================
DIRECTORS
For the purposes of their service as directors to the Davis Funds, the business
address for each of the directors is 2949 E. Elvira Road, Suite 101, Tucson, AZ
85706. Each Director serves until their retirement, resignation, death or
removal. Directors must retire at the close of business on the last day of the
calendar year in which the Director attains age seventy-two (72), except that
any person who was a Director on July 1, 1994, and at that date was
seventy-three (73) years of age or less shall retire from the Board of Directors
and cease being a Director at the close of business on the last day of the year
in which the Director attains age seventy-four (74).
NUMBER OF
TERM OF PORTFOLIOS IN
OFFICE AND PRINCIPAL FUND COMPLEX
POSITION(S) LENGTH OF OCCUPATION(S) DURING OVERSEEN BY OTHER DIRECTORSHIPS HELD BY
NAME AND AGE HELD WITH FUND TIME SERVED PAST FIVE YEARS DIRECTOR DIRECTOR
- ------------------ ---------------- -------------- ------------------------ ---------------- -------------------------------
INDEPENDENT DIRECTORS
WESLEY E. Director director President of Bass & 11 none
BASS, JR. since 1990 Associates (financial
(born 8/21/31) consulting); formerly
First Deputy City Treasurer,
City of Chicago; and
Executive Vice President,
Chicago Title and Trust
Company (bank and trust).
MARC P. BLUM Director director Chief Executive 11 Director, Legg Mason Trust
(born 9/9/42) since 1986 Officer, World Total (asset management company)
Return Fund, LLLP; Of and Rodney Trust Company
Counsel to Gordon, (Delaware); Former Director,
Feinblatt, Rothman, Mid-Atlantic Realty Trust
Hoffberger and (real estate investment
Hollander, LLC (law trust); Trustee, College of
firm). Notre Dame of Maryland,
McDonogh School and other
public charities, private
foundations, and businesses.
THOMAS S. GAYNER Director director Chief Investment 11 Markel Corporation.
(born 12/16/61) since 2004 Officer Markel
Corporation (insurance
company).
JERRY D. GEIST Director director Chairman, Santa Fe 11 Director, CH2M-Hill, Inc.
(born 5/23/34) since 1986 Center Enterprises (engineering);Chairman, Santa
(energy project Fe Center Enterprises,
development); Retired Investment Committee for
Chairman and Microgeneration Technology
President, Public Fund, UTECH Funds.
Service Company of New
Mexico
38
DAVIS NEW YORK VENTURE FUND
2949 East Elvira Road, Suite 101
Tucson, Arizona 85706
============================================================================================================================
DIRECTORS - (CONTINUED)
NUMBER OF
TERM OF PORTFOLIOS IN
OFFICE AND PRINCIPAL FUND COMPLEX
POSITION(S) LENGTH OF OCCUPATION(S) DURING OVERSEEN BY OTHER DIRECTORSHIPS HELD BY
NAME AND AGE HELD WITH FUND TIME SERVED PAST FIVE YEARS DIRECTOR DIRECTOR
- ------------------ ---------------- -------------- ------------------------ ---------------- -------------------------------
INDEPENDENT DIRECTORS - CONTINUED
D. JAMES GUZY Director director Chairman, PLX 11 Director, Intel Corp.
(born 3/7/36) since 1982 Technology, Inc. (semi-conductor
(semi-conductor manufacturer), Cirrus Logic
manufacturer). Corp. (semi-conductor
manufacturer), Alliance
Technology Fund (a mutual
fund), Micro Component
Technology, Inc.
(micro-circuit handling and
testing equipment
manufacturer), LogicVision,
Inc. (semi-conductor software
company), and Tessera
Technologies, Inc.
(semi-conductor packaging
company); Former Director,
Novellus Systems, Inc.
(semi-conductor manufacturer).
G. BERNARD Director director Managing General 11 none
HAMILTON since 1978 Partner, Avanti
(born 3/18/37) Partners, L.P.
(investment
partnership).
ROBERT P. Director director Chairman, Northroad 11 none
MORGENTHAU since 2002 Capital Management,
(born 3/22/57) LLC (an investment
management firm) since June
2002; President of Private
Advisory Services of Bank of
America (an investment
management firm) from 2001
until 2002; prior to that a
managing director and global
head of marketing and
distribution for Lazard Asset
Management (an investment
management firm) for ten
years.
THEODORE B. Director director Chairman of John 11 Mayor of the Incorporated
SMITH, JR. since 1994 Hassall, Inc. Village of Mill Neck.
(born 12/23/32) (fastener
manufacturing);
Chairman of Cantrock
Realty.
39
DAVIS NEW YORK VENTURE FUND
2949 East Elvira Road, Suite 101
Tucson, Arizona 85706
============================================================================================================================
DIRECTORS - (CONTINUED)
NUMBER OF
TERM OF PORTFOLIOS IN
OFFICE AND PRINCIPAL FUND COMPLEX
POSITION(S) LENGTH OF OCCUPATION(S) DURING OVERSEEN BY OTHER DIRECTORSHIPS HELD BY
NAME AND AGE HELD WITH FUND TIME SERVED PAST FIVE YEARS DIRECTOR DIRECTOR
- ------------------ ---------------- -------------- ------------------------ ---------------- -------------------------------
INDEPENDENT DIRECTORS - CONTINUED
CHRISTIAN R. Director director General Partner of 11 none
SONNE since 1990 Tuxedo Park Associates
(born 5/6/36) (land holding and
development firm);
President and Chief
Executive Officer of
Mulford Securities
Corporation (private
investment fund) until
1990; formerly Vice
President of Goldman
Sachs & Co.
(investment banking).
MARSHA WILLIAMS Director director Executive Vice 14 Director of the Selected
(born 3/28/51) since 1999 President and Chief Funds (consisting of three
Financial Officer of portfolios) since 1996;
Equity Office Director, Modine
Properties Trust (a Manufacturing, Inc. (heat
real estate investment transfer technology);
trust); Former Chief Director, Chicago Bridge &
Administrative Officer Iron Company, N.V.
of Crate & Barrel (industrial construction and
(home furnishings engineering).
retailer); former Vice
President and
Treasurer, Amoco
Corporation (oil & gas
company).
INSIDE DIRECTORS*
JEREMY H. BIGGS Director/ director Vice Chairman, Head of 11 Former Director of the Van
(born 8/16/35) Chairman since 1994 Equity Research, Eck/Chubb Funds six
Chairman of U.S. portfolios (mutual fund).
Investment Policy
Committee and Member
of the International
Investment Committee,
all for Fiduciary
Trust Company
International (money
management firm)
Consultant to Davis
Selected Advisers,
L.P.
40
DAVIS NEW YORK VENTURE FUND
2949 East Elvira Road, Suite 101
Tucson, Arizona 85706
============================================================================================================================
DIRECTORS - (CONTINUED)
NUMBER OF
TERM OF PORTFOLIOS IN
OFFICE AND PRINCIPAL FUND COMPLEX
POSITION(S) LENGTH OF OCCUPATION(S) DURING OVERSEEN BY OTHER DIRECTORSHIPS HELD BY
NAME AND AGE HELD WITH FUND TIME SERVED PAST FIVE YEARS DIRECTOR DIRECTOR
- ------------------ ---------------- -------------- ------------------------ ---------------- -------------------------------
INSIDE DIRECTORS* - CONTINUED
ANDREW A. DAVIS Director director President or Vice 14 Director of the Selected
(born 6/25/63) since 1997 President of each Funds (consisting of three
Davis Fund and portfolios) since 1998.
Selected Fund;
President, Davis
Selected Advisers,
L.P., and also serves
as an executive
officer in certain
companies affiliated
with the Adviser.
CHRISTOPHER C. Director director Chief Executive 14 Director of the Selected
DAVIS since 1997 Officer, President or Funds (consisting of three
(born 7/13/65) Vice President of each portfolios) since 1998.
Davis Fund and Selected Fund;
Chairman and Chief Executive
Officer, Davis Selected
Advisers, L.P., and also
serves as an executive
officer in certain companies
affiliated with the Adviser,
including sole member of the
Adviser's general partner,
Davis Investments, LLC;
Employee of Shelby Cullom
Davis & Co. (registered
broker/dealer).
* Jeremy H. Biggs, Andrew A. Davis and Christopher C. Davis own partnership
units (directly, indirectly or both) of the Adviser and are considered to
be "interested persons" of the Funds as defined in the Investment Company
Act of 1940. Andrew A. Davis and Christopher C. Davis are brothers.
41
DAVIS NEW YORK VENTURE FUND
2949 East Elvira Road, Tucson, Arizona 85706
================================================================================
DIRECTORS OFFICERS
Wesley E. Bass, Jr. Jeremy H. Biggs
Jeremy H. Biggs Chairman
Marc P. Blum Christopher C. Davis
Andrew A. Davis President
Christopher C. Davis Andrew A. Davis
Thomas S. Gaynor Vice President
Jerry D. Geist Kenneth C. Eich
D. James Guzy Executive Vice President &
G. Bernard Hamilton Principal Executive Officer
Robert P. Morgenthau Sharra L. Reed
Theodore B. Smith, Jr. Vice President & Chief Compliance
Christian R. Sonne Officer
Marsha Williams Douglas A. Haines
Vice President
& Principal Accounting Officer
Thomas D. Tays
Vice President & Secretary
INVESTMENT ADVISER
Davis Selected Advisers, L.P. (doing business as "Davis Advisors")
2949 East Elvira Road, Suite 101
Tucson, Arizona 85706
(800) 279-0279
DISTRIBUTOR
Davis Distributors, LLC
2949 East Elvira Road, Suite 101
Tucson, Arizona 85706
TRANSFER AGENT & CUSTODIAN
State Street Bank and Trust Company
c/o The Davis Funds
P.O. Box 8406
Boston, Massachusetts 02266-8406
COUNSEL
Seyfarth Shaw LLP
55 East Monroe Street, Suite 4200
Chicago, Illinois 60603-5803
AUDITORS
KPMG LLP
707 Seventeenth Street
Suite 2700
Denver, Colorado 80202
===============================================================================
FOR MORE INFORMATION ABOUT DAVIS NEW YORK VENTURE FUND, INC. INCLUDING
MANAGEMENT FEE, CHARGES, AND EXPENSES, SEE THE CURRENT PROSPECTUS, WHICH MUST
PRECEDE OR ACCOMPANY THIS REPORT. THE FUND'S STATEMENT OF ADDITIONAL INFORMATION
CONTAINS ADDITIONAL INFORMATION ABOUT THE FUND'S DIRECTORS AND IS AVAILABLE
WITHOUT CHARGE UPON REQUEST BY CALLING 1-800-279-0279. QUARTERLY FACT SHEETS ARE
AVAILABLE ON THE FUND'S WEBSITE AT WWW.DAVISFUNDS.COM.
===============================================================================
[DAVIS FUNDS LOGO]
Davis Advisors
2949 East Elvira Road
Suite 101
Tucson, AZ 85706
1-800-279-0279
www.davisfunds.com
DAVIS RESEARCH FUND
PART OF DAVIS NEW YORK VENTURE FUND, INC.
JULY 31, 2004
ANNUAL REPORT
[DAVIS FUNDS LOGO OMITTED]
TABLE OF CONTENTS
Management's Discussion and Analysis...........................................2
Fund Performance and Supplementary Information.................................4
Schedule of Investments.......................................................10
Statement of Assets and Liabilities...........................................12
Statement of Operations.......................................................13
Statements of Changes in Net Assets...........................................14
Notes to Financial Statements.................................................15
Financial Highlights..........................................................21
Report of Independent Registered Public Accounting Firm.......................24
Fund Information..............................................................25
Directors and Officers........................................................26
1
DAVIS RESEARCH FUND
2949 East Elvira Road, Suite 101
Tucson, Arizona 85706
================================================================================
MANAGEMENT'S DISCUSSION AND ANALYSIS
MARKET ENVIRONMENT
During the year ended July 31, 2004, the stock market, as measured by the
Standard & Poor's 500(R) Index(1), returned 13.17%. U.S. economic activity, as
measured by the gross domestic product, improved sharply in the third and fourth
quarters of 2003. Economic activity continued to increase in the first two
quarters of 2004, but at a slower rate. Interest rates, as measured by the
10-year Treasury bond, traded in a narrow range from August 2003 through
mid-January 2004. Interest rates then decreased, to begin a rapid rise in
mid-March until peaking in June 2004. Interest rates decreased from that point
to the end of the fiscal year. The S&P 500(R) Index increased steadily from
August through December 2003, and has been in a narrow trading range in 2004.
Davis Advisors' investment strategy is driven by individual stock selection in
which we attempt to construct an "all-weather" portfolio which is not optimized
to a single set of economic conditions.
PERFORMANCE OVERVIEW
Davis Research Fund's Class A shares delivered a total return on net asset value
of 12.50% for the fiscal year ended July 31, 2004(2), trailing the Standard &
Poor's 500(R) Index(1) by 67 basis points. The Fund's investment strategy is to
seek out companies with expanding earnings that can be purchased at value prices
and held for the long-term. Under normal circumstances the Fund invests the
majority of its assets in equity securities issued by large- and
medium-capitalization companies.
The Fund's largest sector weightings were in automotive and media companies. The
Fund's holdings in the media sector out-performed the S&P 500(R) Index, while
the Fund's holdings in the automotive sector under-performed the Index. The Fund
owned 17 companies at the beginning of the fiscal year and ended the year owning
20 companies. At fiscal year end the Fund held 66% of net assets in its top ten
holdings.
As a group, foreign companies made a positive contribution to performance during
the fiscal year ended July 31, 2004. As of year-end, approximately 24% of net
assets was invested in foreign companies.
The principal holdings contributing to performance were: Lagardere(3), a media
company, Altria Group, a consumer products company, and Groupe Bruxelle, a
diversified company. All three were top ten holdings at fiscal year end.
Lagardere increased by 38.67%, Altria Group increased by 25.70%, and Groupe
Bruxelle increased by 42.10% over the fiscal year ended July 31, 2004.
The principal holdings detracting from performance were: Comcast, a cable
television company, AutoZone, an automotive company, and Cardinal Health, a
distributor. Comcast and AutoZone were top ten holdings at fiscal year end.
Comcast decreased by 17.31% since being purchased in February 2004 and Cardinal
Health decreased by 11.83% since being purchased in July 2004. AutoZone
decreased by 7.28% over the fiscal year ended July 31, 2004.
A company's contribution to the Fund's performance is a product of both its
appreciation or depreciation and its weighting within the portfolio. For
example, a 5% holding that rises 20% has twice as much impact as a 1% holding
that rises 50%.
2
DAVIS RESEARCH FUND
2949 East Elvira Road, Suite 101
Tucson, Arizona 85706
================================================================================
MANAGEMENT'S DISCUSSION AND ANALYSIS - (CONTINUED)
This Annual Report is authorized for use by existing shareholders. Prospective
shareholders must receive a current Davis Research Fund prospectus, which
contains more information about investment strategies, risks, charges, and
expenses. Please read the prospectus carefully before investing or sending
money.
Davis Research Fund's investment objective is long-term growth of capital. There
can be no assurance that the Fund will achieve its objective. The primary risks
of an investment in Davis Research Fund are: (1) market risk, (2) company risk,
(3) medium capitalization risk, (4) selection risk, and (5) focused portfolio
risk. See the prospectus for a full description of each risk.
(1) The S&P 500(R) Index is an unmanaged index of 500 selected common stocks,
most of which are listed on the New York Stock Exchange. The index is adjusted
for dividends, weighted towards stocks with large market capitalizations, and
represents approximately two-thirds of the total market value of all domestic
common stocks. Investments cannot be made directly in the index.
(2) Total return assumes reinvestment of dividends and capital gain
distributions. Past performance is not a guarantee of future results. Investment
return and principal value will vary so that, when redeemed, an investor's
shares may be worth more or less than when purchased. Below are the average
annual total returns for Davis Research Fund's Class A shares for the periods
ended July 31, 2004. Returns for other classes of shares will vary from the
following returns:
(Without a 4.75% sales charge taken into consideration)
- --------------------------------------------------------------------------------
FUND NAME ONE YEAR INCEPTION
- --------------------------------------------------------------------------------
Davis Research Fund A 12.50% 4.43% - 10/31/01
- --------------------------------------------------------------------------------
(With the maximum 4.75% sales charge taken into consideration)
- --------------------------------------------------------------------------------
FUND NAME ONE YEAR INCEPTION
- --------------------------------------------------------------------------------
Davis Research Fund A 7.11% 2.59% - 10/31/01
- --------------------------------------------------------------------------------
Fund performance changes over time and current performance may be higher or
lower than stated. For more current information please call Davis Funds
Shareholder Services at 1-800-279-0279.
(3) This Management Discussion and Analysis discusses a number of individual
companies. The information provided in this report does not provide information
reasonably sufficient upon which to base an investment decision and should not
be considered a recommendation to purchase or sell any particular security. The
schedule of investments lists the Fund's holdings of each company discussed.
Shares of the Davis Research Fund are not deposits or obligations of any bank,
are not guaranteed by any bank, are not insured by the FDIC or any other agency,
and involve investment risks, including possible loss of the principal amount
invested.
3
DAVIS RESEARCH FUND
CLASS A FUND PERFORMANCE
================================================================================
- -----------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN EXPENSE EXAMPLE
FOR THE PERIODS ENDED JULY 31, 2004 BEGINNING ENDING EXPENSES PAID
(This calculation includes an ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
initial sales charge of 4.75%.) (02/01/04) (07/31/04) (02/01/04-07/31/04)
---------- ---------- -------------------
One Year............................ 7.11% Actual............... $1,000.00 $977.10 $4.52
Life of the Class (October 31, 2001 Hypothetical (5% return
through July 31, 2004)............ 2.59% before expenses)... $1,000.00 $1,020.29 $4.62
- -----------------------------------------------------------------------------------------------------------------------
*Expenses are equal to the Class's annualized expense ratio (0.92%), multiplied
by the average account value over the period, multiplied by 182/366 (to reflect
the one-half year period). See Notes to Performance on page 7 for a description
of the "Expense Example".
$10,000 INVESTED AT INCEPTION. Let's say you invested $10,000 in Davis Research
Fund, Class A Shares on October 31, 2001 (commencement of operations) and paid a
4.75% sales charge. As the chart shows, by July 31, 2004 the value of your
investment would have been $10,729 - a 7.29% increase on your initial
investment. For comparison, the Standard & Poor's 500 Stock Index is also
presented on the chart below.
[GRAHPIC OMITTED]
S&P 500 DRF CLASS A
---------- -----------
10/31/01 $10,000.00 $10,000.00
07/31/02 $ 8,696.00 $ 7,846.00
07/31/03 $ 9,623.00 $ 9,537.00
07/31/04 $10,889.00 $10,729.00
The Standard & Poor's 500 Stock Index is an unmanaged index of 500 selected
common stocks, most of which are listed on the New York Stock Exchange. The
index is adjusted for dividends, weighted towards stocks with large market
capitalizations, and represents approximately two-thirds of the total market
value of all domestic common stocks.
The performance data for Davis Research Fund contained in this report represents
past performance and assumes that all distributions were reinvested, and should
not be considered as an indication of future performance from an investment in
the Fund today. The investment return and principal value will fluctuate so that
shares may be worth more or less than their original cost when redeemed. Returns
shown do not reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares.
4
DAVIS RESEARCH FUND
CLASS B FUND PERFORMANCE
================================================================================
- -----------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN EXPENSE EXAMPLE
FOR THE PERIODS ENDED JULY 31, 2004 BEGINNING ENDING EXPENSES PAID
(This calculation includes any applicable ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
contingent deferred sales charge.) (02/01/04) (07/31/04) (02/01/04-07/31/04)
---------- ---------- -------------------
One Year....................... 6.93% Actual............... $1,000.00 $970.50 $9.85
Life of Class (October 31, 2001 Hypothetical (5% return
through July 31,2004)..... 2.00% before expenses)... $1,000.00 $1,014.87 $10.07
- -----------------------------------------------------------------------------------------------------------------------
*Expenses are equal to the Class's annualized expense ratio (2.01%), multiplied
by the average account value over the period, multiplied by 182/366 (to reflect
the one-half year period). See Notes to Performance on page 7 for a description
of the "Expense Example".
$10,000 INVESTED AT INCEPTION. Let's say you invested $10,000 in Davis Research
Fund, Class B Shares on October 31, 2001 (commencement of operations). As the
chart shows, by July 31, 2004 the value of your investment (less a contingent
deferred sales charge) would have been $10,560 - a 5.60% increase on your
initial investment. For comparison, the Standard & Poor's 500 Stock Index is
also presented on the chart below.
[GRAHPIC OMITTED]
S&P 500 DRF CLASS B
---------- -----------
10/31/01 $10,000.00 $10,000.00
07/31/02 $ 8,696.00 $ 8,170.00
07/31/03 $ 9,623.00 $ 9,790.00
07/31/04 $10,889.00 $10,560.00
The Standard & Poor's 500 Stock Index is an unmanaged index of 500 selected
common stocks, most of which are listed on the New York Stock Exchange. The
index is adjusted for dividends, weighted towards stocks with large market
capitalizations, and represents approximately two-thirds of the total market
value of all domestic common stocks.
The performance data for Davis Research Fund contained in this report represents
past performance and assumes that all distributions were reinvested, and should
not be considered as an indication of future performance from an investment in
the Fund today. The investment return and principal value will fluctuate so that
shares may be worth more or less than their original cost when redeemed. Returns
shown do not reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares.
5
DAVIS RESEARCH FUND
CLASS C FUND PERFORMANCE
================================================================================
- -------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN EXPENSE EXAMPLE
FOR THE PERIODS ENDED JULY 31, 2004 BEGINNING ENDING EXPENSES PAID
(This calculation includes any applicable ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
contingent deferred sales charge.) (02/01/04) (07/31/04) (02/01/04-07/31/04)
---------- ---------- -------------------
One Year....................... 9.93% Actual............... $1,000.00 $970.50 $9.85
Life of Class (October 31, 2001 Hypothetical (5% return
through July 31,2004)..... 3.05% before expenses)... $1,000.00 $1,014.87 $10.07
- -------------------------------------------------------------------------------------------------------------------
*Expenses are equal to the Class's annualized expense ratio (2.01%), multiplied
by the average account value over the period, multiplied by 182/366 (to reflect
the one-half year period). See Notes to Performance on page 7 for a description
of the "Expense Example".
$10,000 INVESTED AT INCEPTION. Let's say you invested $10,000 in Davis Research
Fund, Class C Shares on October 31, 2001 (commencement of operations). As the
chart shows, by July 31, 2004 the value of your investment would have been
$10,860 - an 8.60% increase on your initial investment. For comparison, the
Standard & Poor's 500 Stock Index is also presented on the chart below.
[GRAHPIC OMITTED]
S&P 500 DRF CLASS C
---------- -----------
10/31/01 $10,000.00 $10,000.00
07/31/02 $ 8,696.00 $ 8,170.00
07/31/03 $ 9,623.00 $ 9,790.00
07/31/04 $10,889.00 $10,860.00
The Standard & Poor's 500 Stock Index is an unmanaged index of 500 selected
common stocks, most of which are listed on the New York Stock Exchange. The
index is adjusted for dividends, weighted towards stocks with large market
capitalizations, and represents approximately two-thirds of the total market
value of all domestic common stocks.
The performance data for Davis Research Fund contained in this report represents
past performance and assumes that all distributions were reinvested, and should
not be considered as an indication of future performance from an investment in
the Fund today. The investment return and principal value will fluctuate so that
shares may be worth more or less than their original cost when redeemed. Returns
shown do not reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares.
6
DAVIS RESEARCH FUND
NOTES TO PERFORMANCE
================================================================================
THE FOLLOWING DISCLOSURE PROVIDES IMPORTANT INFORMATION REGARDING THE FUND'S
EXPENSE EXAMPLE, WHICH APPEARS IN EACH CLASS'S FUND PERFORMANCE SECTION IN THIS
ANNUAL REPORT. PLEASE REFER TO THIS INFORMATION WHEN REVIEWING THE EXPENSE
EXAMPLE FOR EACH CLASS.
EXAMPLE
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchases; and (2) ongoing costs,
including advisory and administrative fees, distribution and/or service (12b-1)
fees, and other Fund expenses. The Expense Example is intended to help you
understand your ongoing costs (in dollars) of investing in the Fund and to
compare these costs with the ongoing costs of investing in other mutual funds.
The Expense Example is based on an investment of $1,000 invested at the
beginning of the period and held for the entire period indicated, which for each
class is from 02/01/04 to 07/31/04. Please note that the Expense Example is
general and does not reflect certain transaction or account specific costs,
which may increase your total costs of investing in the Fund. If these
transaction or account specific costs were included in the Expense Example, the
expenses would have been higher.
ACTUAL EXPENSES
The information represented in the row entitled "Actual" provides information
about actual account values and actual expenses. You may use the information in
this row, together with the amount you invested, to estimate the expenses that
you paid over the period. Simply divide your account value by $1,000 (for
example, an $8,600 account value divided by $1,000 = 8.6), then multiply the
result by the number under the heading "Expenses Paid During Period" to estimate
the expenses you paid for on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The information represented in the row entitled "Hypothetical (5% return before
expenses)" provides information about hypothetical account values and
hypothetical expenses based on the Fund's actual expense ratio and an assumed
rate of return of 5% per year before expenses, which is not the Fund's actual
return. The hypothetical account values and expenses may not be used to estimate
the actual ending account balance or expenses you paid for the period. You may
use this information to compare the ongoing costs of investing in the Fund and
other funds. To do so, compare this 5% hypothetical example with the 5%
hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads). Therefore the information in the row entitled "Hypothetical (5%
return before expenses)" is useful in comparing ongoing costs only, and will not
help you determine the relative total costs of owning different funds. In
addition, if these transactional costs were included, your costs would have been
higher.
7
DAVIS RESEARCH FUND
PORTFOLIO HOLDINGS AS OF JULY 31, 2004
================================================================================
PORTFOLIO MAKEUP (% OF FUND NET ASSETS) SECTOR WEIGHTING
(% OF LONG TERM PORTFOLIO)
[PIE CHART OMITTED] [PIE CHART OMITTED]
Short Term Investments, Distributors 3.0%
Other Assets & Liabilities 7.8% Building Products 3.2%
Common Stock 92.2% Cable Television 6.8%
Automotive 22.0%
Property/Casualty Insurance 5.1%
Consumer Products 7.9%
Energy 11.4%
Food/Beverage & Restaurant 3.9%
Discount Retailer 7.9%
Diversified 4.0%
Financial Services 2.5%
Media 16.3%
Pharmaceutical and Health Care 6.0%
TOP 10 HOLDINGS % OF FUND
SECURITY SECTOR NET ASSETS
- ----------------------------------------------------------------------------------------------------------
AutoZone, Inc. Automotive 15.24%
Lagardere S.C.A. Media 11.22%
Altria Group, Inc. Consumer Products 7.25%
Comcast Corp., Special Class A Cable Television 6.25%
AutoNation, Inc. Automotive 5.04%
EOG Resources, Inc. Energy 4.73%
Berkshire Hathaway Inc., Class A Property/Casualty Insurance 4.73%
TJX Cos., Inc. Discount Retailer 4.01%
WPP Group PLC Media 3.85%
Groupe Bruxelles Lambert S.A. Diversified 3.71%
8
DAVIS RESEARCH FUND
PORTFOLIO ACTIVITY AUGUST 1, 2003 THROUGH JULY 31, 2004
================================================================================
NEW POSITIONS ADDED (8/1/03-7/31/04)
(Highlighted positions are those greater than 3.00% of 7/31/04 total net assets)
% OF 7/31/04
DATE OF 1ST FUND
SECURITY SECTOR PURCHASE NET ASSETS
- -----------------------------------------------------------------------------------------------------------
AmerisourceBergen Corp. Pharmaceutical and Health Care 08/28/03 2.78%
Cardinal Health, Inc. Distributors 07/14/04 2.80%
Comcast Corp., Special Class A Cable Television 02/05/04 6.25%
EOG Resources, Inc. Energy 05/03/04 4.73%
Merck & Co., Inc. Pharmaceutical and Health Care 12/01/03 -
Novartis AG, Registered Pharmaceutical and Health Care 10/30/03 2.73%
Occidental Petroleum Corp. Energy 08/01/03 2.67%
Takefuji Corp. Financial Services 08/21/03 2.34%
Transocean Inc. Energy 01/23/04 3.08%
POSITIONS CLOSED (8/1/03-7/31/04)
(Gains and losses greater than $150,000 are highlighted)
DATE OF
SECURITY SECTOR FINAL SALE GAIN/(LOSS)
- -----------------------------------------------------------------------------------------------------------
Automatic Data Processing, Inc. Information/Information
Processing 06/25/04 $ 185,385
Duke Energy Corp. Energy 07/16/04 480,491
Electrolux AB, Series B Manufacturing 06/28/04 86,968
Merck & Co., Inc. Pharmaceutical and Health Care 02/12/04 126,942
Pfizer Inc. Pharmaceutical and Health Care 05/12/04 192,343
9
DAVIS RESEARCH FUND
Schedule of Investments
July 31, 2004
VALUE
SHARES SECURITY (NOTE 1)
==============================================================================================================
COMMON STOCK - (92.23%)
AUTOMOTIVE - (20.28%)
92,300 AutoNation, Inc.*.............................................................. $ 1,487,876
58,300 AutoZone, Inc.*................................................................ 4,500,760
--------------
5,988,636
--------------
BUILDING PRODUCTS - (2.97%)
26,000 Home Depot, Inc. .............................................................. 876,720
--------------
CABLE TELEVISION - (6.25%)
68,900 Comcast Corp., Special Class A*................................................ 1,846,175
--------------
CONSUMER PRODUCTS - (7.25%)
45,000 Altria Group, Inc. ............................................................ 2,142,000
--------------
DISCOUNT RETAILER - (7.25%)
23,500 Costco Wholesale Corp. ........................................................ 955,392
50,500 TJX Cos., Inc. ................................................................ 1,185,235
--------------
2,140,627
--------------
DISTRIBUTORS - (2.80%)
18,600 Cardinal Health, Inc. ......................................................... 827,700
--------------
DIVERSIFIED - (3.71%)
17,700 Groupe Bruxelles Lambert S.A. ................................................. 1,096,686
--------------
ENERGY - (10.48%)
22,000 EOG Resources, Inc. ........................................................... 1,398,100
16,000 Occidental Petroleum Corp. .................................................... 788,320
32,000 Transocean Inc.*............................................................... 908,800
--------------
3,095,220
--------------
FINANCIAL SERVICES - (2.34%)
9,600 Takefuji Corp. ................................................................ 689,562
--------------
FOOD/BEVERAGE & RESTAURANT - (3.59%)
5,500 Heineken Holding NV, Class A................................................... 152,457
33,000 McDonald's Corp. .............................................................. 907,500
--------------
1,059,957
--------------
MEDIA - (15.07%)
54,500 Lagardere S.C.A. .............................................................. 3,314,511
122,800 WPP Group PLC.................................................................. 1,135,947
--------------
4,450,458
--------------
PHARMACEUTICAL AND HEALTH CARE - (5.51%)
15,200 AmerisourceBergen Corp. ....................................................... 821,712
18,000 Novartis AG, Registered........................................................ 805,645
--------------
1,627,357
--------------
PROPERTY/CASUALTY INSURANCE - (4.73%)
16 Berkshire Hathaway Inc., Class A*.............................................. 1,396,000
--------------
Total Common Stock - (identified cost $22,745,663)............................. 27,237,098
--------------
10
DAVIS RESEARCH FUND
SCHEDULE OF INVESTMENTS - (Continued)
July 31, 2004
VALUE
PRINCIPAL SECURITY (NOTE 1)
==============================================================================================================
SHORT TERM INVESTMENTS - (7.84%)
$990,000 Lehman Brothers Inc. Joint Repurchase Agreement, 1.37%,
08/02/04, dated 07/30/04, repurchase value of $990,113
(collateralized by: U.S. Government obligations in a pooled cash account,
total market value $1,009,800)............................................. $ 990,000
1,325,000 Nomura Securities International, Inc. Joint Repurchase Agreement, 1.37%,
08/02/04, dated 07/30/04, repurchase value of $1,325,151
(collateralized by: U.S. Government obligations in a pooled cash account,
total market value $1,351,500)............................................. 1,325,000
--------------
Total Short Term Investments - (identified cost $2,315,000)......... 2,315,000
--------------
Total Investments - (100.07%) - (identified cost $25,060,663) - (a)............ 29,552,098
Liabilities Less Other Assets - (0.07%)........................................ (22,078)
--------------
Net Assets - (100%)................................................. $ 29,530,020
==============
*Non-Income Producing Security.
(a) Aggregate cost for Federal income tax purposes is $25,081,896. At July 31,
2004, unrealized appreciation (depreciation) of securities for Federal income
tax purposes is as follows:
Unrealized appreciation........................................................ $ 4,767,198
Unrealized depreciation....................................................... (296,996)
--------------
Net unrealized appreciation......................................... $ 4,470,202
==============
SEE NOTES TO FINANCIAL STATEMENTS
11
DAVIS RESEARCH FUND
STATEMENT OF ASSETS AND LIABILITIES
At July 31, 2004
================================================================================
ASSETS:
Investments in securities, at value (identified cost $25,060,663) (see accompanying
Schedule of Investments)......................................................... $ 29,552,098
Cash ................................................................................ 2,880
Receivables:
Dividends and interest receivable................................................ 16,900
-----------------
Total assets................................................................ 29,571,878
-----------------
LIABILITIES:
Accrued expenses..................................................................... 22,322
Accrued management fee............................................................... 19,536
-----------------
Total liabilities........................................................... 41,858
-----------------
NET ASSETS ............................................................................... $ 29,530,020
=================
NET ASSETS CONSIST OF:
Par value of shares of capital stock................................................. $ 133,009
Additional paid-in capital........................................................... 26,437,761
Undistributed net investment income.................................................. 113,963
Net unrealized appreciation on investments and translation of assets and
liabilities denominated in foreign currency...................................... 4,492,351
Accumulated net realized losses from investments and foreign currency transactions... (1,647,064)
-----------------
Net assets.................................................................. $ 29,530,020
=================
CLASS A SHARES
Net assets....................................................................... $ 29,527,762
Shares outstanding............................................................... 2,659,962
Net asset value and redemption price per share .................................. $ 11.10
=========
Maximum offering price per share (100/95.25 of $11.10)*.......................... $ 11.65
=========
CLASS B SHARES
Net assets....................................................................... $ 1,129
Shares outstanding............................................................... 104
Net asset value, offering and redemption price per share......................... $ 10.86
=========
CLASS C SHARES
Net assets....................................................................... $ 1,129
Shares outstanding............................................................... 104
Net asset value, offering and redemption price per share......................... $ 10.86
=========
* On purchases of $100,000 or more, the offering price is reduced.
SEE NOTES TO FINANCIAL STATEMENTS
12
DAVIS RESEARCH FUND
STATEMENT OF OPERATIONS
For the year ended July 31, 2004
================================================================================
INVESTMENT INCOME:
Income:
Dividends (Net of foreign withholding taxes of $26,562).......................... $ 442,728
Interest......................................................................... 20,722
--------
Total income............................................................. 463,450
Expenses:
Management fees (Note 3)........................................ $ 219,231
Custodian fees.................................................. 39,092
Transfer agent fees
Class A.................................................... 1,984
Class B.................................................... 4
Class C.................................................... 4
Audit fees...................................................... 12,000
Legal fees...................................................... 77
Accounting fees (Note 3)........................................ 6,000
Reports to shareholders ........................................ 568
Directors' fees and expenses ................................... 579
Registration and filing fees ................................... 2,422
Miscellaneous .................................................. 6,356
Payments under distribution plan (Note 4)
Class B.................................................... 8
Class C.................................................... 8
---------------
Total expenses.......................................................... 288,333
Expenses paid indirectly (Note 6)....................................... (19)
-----------------
Net expenses............................................................ 288,314
-----------------
Net investment income .............................................. 175,136
-----------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND FOREIGN CURRENCY:
Net realized gain (loss) from:
Investment transactions.......................................................... 1,446,682
Foreign currency transactions.................................................... (15,403)
Net increase in unrealized appreciation on investments and translation of
assets and liabilities denominated in foreign currency........................... 1,657,866
-----------------
Net realized and unrealized gain on investments and foreign currency............. 3,089,145
-----------------
Net increase in net assets resulting from operations ................... $ 3,264,281
=================
SEE NOTES TO FINANCIAL STATEMENTS
13
DAVIS RESEARCH FUND
STATEMENTS OF CHANGES IN NET ASSETS
================================================================================
YEAR ENDED YEAR ENDED
JULY 31, JULY 31,
2004 2003
---- ----
OPERATIONS:
Net investment income........................................... $ 175,136 $ 202,672
Net realized gain (loss) from investments and
foreign currency transactions........................... 1,431,279 (917,454)
Net increase in unrealized appreciation on
investments and translation of assets and liabilities
denominated in foreign currency............................. 1,657,866 5,423,121
----------------- ---------------
Net increase in net assets resulting from operations........ 3,264,281 4,708,339
DIVIDENDS AND DISTRIBUTIONS
TO SHAREHOLDERS FROM:
Net investment income:
Class A ................................................... (188,738) (169,641)
CAPITAL SHARE TRANSACTIONS:
Net increase (decrease) in net assets resulting from capital share
transactions (Note 5):
Class A ................................................... 283,429 8,007
Class B ................................................... - (75)
Class C ................................................... - (75)
----------------- ---------------
Total increase in net assets................................ 3,358,972 4,546,555
NET ASSETS:
Beginning of year............................................... 26,171,048 21,624,493
----------------- ---------------
End of year*.................................................... $ 29,530,020 $ 26,171,048
================= ===============
*Including undistributed net investment income of........... $ 113,963 $ 142,968
SEE NOTES TO FINANCIAL STATEMENTS
14
DAVIS RESEARCH FUND
NOTES TO FINANCIAL STATEMENTS
July 31, 2004
================================================================================
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Fund is a separate series of Davis New York Venture Fund, Inc., which is
registered under the Investment Company Act of 1940, as amended, as a
non-diversified, open-end management investment company. The Fund's investment
objective is long term growth of capital. The Fund commenced operations on
October 31, 2001. The Fund offers shares in three classes, Class A, Class B, and
Class C. The Class A shares are sold with a front-end sales charge and the Class
B and Class C shares are sold at net asset value and may be subject to a
contingent deferred sales charge upon redemption. Income, expenses (other than
those attributable to a specific class), and gains and losses are allocated
daily to each class of shares based upon the relative proportion of net assets
represented by each class. Operating expenses directly attributable to a
specific class, such as distribution and transfer agent fees, are charged
against the operations of that class. All classes have identical rights with
respect to voting (exclusive of each Class's distribution arrangement),
liquidation, and distributions. The following is a summary of significant
accounting policies followed by the Fund in the preparation of its financial
statements.
SECURITY VALUATION - Portfolio securities listed on national securities
exchanges are valued at the last reported sales price on the day of valuation.
Securities traded in the over the counter market and listed securities for which
no sale was reported on that date are stated at the average of closing bid and
asked prices. Securities for which market quotations are not readily available,
or whose values have been affected by a significant event occurring after the
close of their primary markets, are valued at fair value as determined in good
faith by the Board of Directors. Short-term obligations are valued at amortized
cost, which approximates fair value. These valuation procedures are reviewed and
subject to approval by the Board of Directors.
MASTER REPURCHASE AGREEMENTS - The Fund, along with other affiliated funds, may
transfer uninvested cash balances into one or more master repurchase agreement
accounts. These balances are invested in one or more repurchase agreements,
secured by U.S. government securities. Securities pledged as collateral for
repurchase agreements are held by a custodian bank until the agreements mature.
Each agreement requires that the market value of the collateral be sufficient to
cover payments of interest and principal; however, in the event of default by
the other party to the agreement, retention of the collateral may be subject to
legal proceedings.
CURRENCY TRANSLATION - The market values of all assets and liabilities
denominated in foreign currencies are recorded in the financial statements after
translation to the U.S. dollar based upon the mean between the bid and offered
quotations of the currencies against U.S. dollars on the date of valuation. The
cost basis of such assets and liabilities is determined based upon historical
exchange rates. Income and expenses are translated at average exchange rates in
effect as accrued or incurred.
FOREIGN CURRENCY - The Fund may enter into forward purchases or sales of foreign
currencies to hedge certain foreign currency denominated assets and liabilities
against declines in market value relative to the U.S. dollar. Forward currency
contracts are marked-to-market daily and the change in market value is recorded
by the Fund as an unrealized gain or loss. When the forward currency contract is
closed, the Fund records a realized gain or loss equal to the difference between
the value of the forward currency contract at the time it was opened and value
at the time it was closed. Investments in forward currency contracts may expose
the Fund to risks resulting from unanticipated movements in foreign currency
exchange rates or failure of the counter-party to the agreement to perform in
accordance with the terms of the contract.
15
DAVIS RESEARCH FUND
NOTES TO FINANCIAL STATEMENTS - (Continued)
July 31, 2004
================================================================================
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED)
Reported net realized foreign exchange gains or losses arise from sales and
maturities of investments, sales of foreign currencies, currency gains or losses
realized between the trade and settlement dates on securities transactions, the
difference between the amounts of dividends, interest and foreign withholding
taxes recorded on the Fund's books, and the U.S. dollar equivalent of the
amounts actually received or paid. Net unrealized foreign exchange gains and
losses arise from changes in the value of assets and liabilities other than
investments in securities at fiscal year end, resulting from changes in the
exchange rate. The Fund includes foreign currency gains and losses realized on
the sale of investments together with market gains and losses on such
investments in the statement of operations.
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 substantially all of its taxable income, including any net realized
gains on investments not offset by loss carryovers, to shareholders. Therefore,
no provision for federal income or excise tax is required. At July 31, 2004, the
Fund had approximately $1,626,000 of capital loss carryforwards available to
offset future capital gains, if any, which expire in 2011.
SECURITIES TRANSACTIONS AND RELATED INVESTMENT INCOME - Securities transactions
are accounted for on the trade date (date the order to buy or sell is executed)
with realized gain or loss on the sale of securities being determined based upon
identified cost. Dividend income is recorded on the ex-dividend date. Interest
income, which includes accretion of discount and amortization of premium, is
accrued as earned.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS - Dividends and distributions to
shareholders are recorded on the ex-dividend date. Net investment income (loss),
net realized gains (losses) and net unrealized appreciation (depreciation) of
investments may differ for financial statement and tax purposes primarily
because of the recognition of certain foreign currency gains (losses) as
ordinary income (loss) for tax purposes and the tax deferral of losses on "wash
sale" transactions. The character of the dividends and distributions made during
the fiscal year from net investment income and net realized securities gains may
differ from their ultimate characterization for Federal income tax purposes.
Also, due to the timing of the dividends and distributions, the fiscal year in
which amounts are distributed may differ from the fiscal year in which income or
realized gain was recorded by the Fund. The Fund adjusts the classification of
distributions to shareholders to reflect the differences between financial
statement amounts and distributions determined in accordance with income tax
regulations. Accordingly, during the year ended July 31, 2004 amounts have been
reclassified to reflect a decrease to undistributed net investment income of
$15,403 and a corresponding decrease to accumulated net realized loss. Net
assets have not been affected by this reclassification.
The tax character of distributions paid during the years ended July 31, 2004 and
2003 is as follows:
2004 2003
------------ ------------
Ordinary income........................... $ 188,738 $ 169,641
16
DAVIS RESEARCH FUND
NOTES TO FINANCIAL STATEMENTS - (Continued)
July 31, 2004
================================================================================
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED)
As of July 31, 2004, the components of distributable earnings (accumulated
losses) on a tax basis were as follows:
2004
------------
Undistributed net investment income....................... $ 113,963
Accumulated net realized losses from investments
and foreign currency transactions..................... (1,625,831)
Net unrealized appreciation on investments and foreign
currency transactions................................. 4,471,118
------------
Total................................................... $ 2,959,250
USE OF ESTIMATES IN FINANCIAL STATEMENTS - In preparing financial statements in
conformity with accounting principles generally accepted in the United States of
America, management makes 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, as well as the reported
amounts of income and expenses during the reporting period. Actual results may
differ from these estimates.
NOTE 2 - PURCHASES AND SALES OF SECURITIES
Purchases and sales of investment securities (excluding short-term
securities) for the year ended July 31, 2004, were $13,306,572 and $11,985,599,
respectively.
NOTE 3 - INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Advisory fees are paid to Davis Advisors (the "Adviser") at the annual rate
of 0.75% of the average net assets for the first $250 million, 0.65% of the
average net assets on the next $250 million and 0.55% of the average net assets
in excess of $500 million. Management fees paid during the year ended July 31,
2004, approximated 0.75% of average net assets.
State Street Bank & Trust Co. ("State Street Bank") is the Fund's primary
transfer agent. The Adviser is also paid for certain transfer agent services.
The fee for these services for the year ended July 31, 2004 amounted to $81.
State Street Bank is the Fund's primary accounting provider. Fees for such
services are included in the custodian fee as State Street Bank also serves as
the Fund's custodian. The Adviser is also paid for certain accounting services.
The fee amounted to $6,000 for the year ended July 31, 2004. Certain directors
and the officers of the Fund are also directors and officers of the general
partner of the Adviser.
Davis Selected Advisers-NY, Inc. ("DSA-NY"), a wholly-owned subsidiary of
the Adviser, acts as sub-adviser to the Fund. DSA-NY performs research and
portfolio management services for the Fund under a Sub-Advisory Agreement with
the Adviser. The Fund pays no fees directly to DSA-NY.
NOTE 4 - DISTRIBUTION AND UNDERWRITING FEES
CLASS A SHARES
Class A shares of the Fund are sold at net asset value plus a sales charge
and are redeemed at net asset value.
During the year ended July 31, 2004, Davis Distributors, LLC, the Fund's
Underwriter (the "Underwriter" or "Distributor") received no commissions earned
on sales of Class A shares of the Fund.
17
DAVIS RESEARCH FUND
NOTES TO FINANCIAL STATEMENTS - (Continued)
July 31, 2004
================================================================================
NOTE 4 - DISTRIBUTION AND UNDERWRITING FEES - (CONTINUED)
CLASS A SHARES - CONTINUED
The Underwriter is reimbursed for amounts paid to dealers as a service fee
or commissions with respect to Class A shares sold by dealers which remain
outstanding during the period. The service fee is paid at an annual rate up to
1/4 of 1% of the average net assets maintained by the responsible dealers. The
Underwriter is not reimbursed for accounts for which the Underwriter pays no
service fees to other firms. There was no service fee for Class A shares of the
Fund for the year ended July 31, 2004.
CLASS B SHARES
Class B shares of the Fund are sold at net asset value and are redeemed at
net asset value less a contingent deferred sales charge if redeemed within six
years of purchase.
The Fund pays a distribution fee to reimburse Davis Distributors, LLC (the
"Distributor") for commission advances on the sale of the Fund's Class B shares.
Payments under the Class B Distribution Plan are limited to an annual rate of
equal to the lesser of 1.25% of the average daily net asset value of the Class B
shares or the maximum amount provided by applicable rule or regulation of the
National Association of Securities Dealers, Inc., ("NASD"), which currently is
1.00%. Therefore, the effective rate of the Class B Distribution Plan is
currently 1%, of which 0.75% may be used to pay distribution expenses and 0.25%
may be used to pay shareholder service fees. The NASD rule also limits the
aggregate amount the Fund may pay for distribution to 6.25% of gross Fund sales
since inception of the Rule 12b-1 plan, plus interest, at 1% over the prime rate
on unpaid amounts. The Distributor intends to seek full payment (plus interest
at prime plus 1%) of distribution charges that exceed the 1% annual limit in
some future period or periods when the plan limits have not been reached.
During the year ended July 31, 2004, Class B shares of the Fund made
distribution payments of $8. During the year ended July 31, 2004, there were no
payments made for service fees.
There were no commission advances by the Distributor during the year ended
July 31, 2004 on the sale of Class B shares of the Fund.
The Distributor intends to seek payment from Class B shares of the Fund in
the amount of $51, which represents the maximum amount allowed under applicable
NASD rules discussed above. The Fund has no contractual obligation to pay any
such distribution charges and the amount, if any, timing and condition of such
payments are solely within the discretion of the Directors who are not
interested persons of the Fund or the Distributor.
A contingent deferred sales charge is imposed upon redemption of certain
Class B shares of the Fund within six years of the original purchase. The charge
is a declining percentage starting at 4% of the lesser of net asset value of the
shares redeemed or the total cost of such shares. During the year ended July 31,
2004 the Distributor received no contingent deferred sales charges from Class B
shares of the Fund.
18
DAVIS RESEARCH FUND
NOTES TO FINANCIAL STATEMENTS - (Continued)
July 31, 2004
================================================================================
NOTE 4 - DISTRIBUTION AND UNDERWRITING FEES - (CONTINUED)
CLASS C SHARES
Class C shares of the Fund are sold at net asset value and are redeemed at
net asset value less a contingent deferred sales charge of 1% if redeemed within
one year of purchase. Payments under the Class C Distribution Plan are limited
to an annual rate equal to the lesser of 1.25% of the average daily net asset
value of the Class C shares or the maximum amount provided by applicable rule or
regulation of the National Association of Securities Dealers, Inc., ("NASD"),
which currently is 1.00%. Therefore, the effective rate of the Class C
Distribution Plan is currently 1%, of which 0.75% may be used to pay
distribution expenses and 0.25% may be used to pay shareholder service fees.
Class C shares are subject to the same 6.25% and 1% limitations applicable to
the Class B Distribution Plan.
During the year ended July 31, 2004, Class C shares of the Fund made
distribution payments of $8. During the year ended July 31, 2004, there were no
payments made for service fees. During the year ended July 31, 2004, the
Distributor received no contingent deferred sales charges from Class C shares of
the Fund.
NOTE 5 - CAPITAL STOCK
At July 31, 2004, there were 3,000,000,000 shares of capital stock ($0.05
par value per share) authorized, 500,000,000 of which shares are classified as
Davis Research Fund. Transactions in capital stock were as follows:
CLASS A
- -------
YEAR ENDED YEAR ENDED
JULY 31, 2004 JULY 31, 2003
------------------------------- -----------------------------
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------
Shares subscribed.............................. 9,095 $ 98,800 28,494 $ 251,825
Shares issued in reinvestment of distributions. 16,988 188,738 19,794 169,641
------------- --------------- ------------ --------------
26,083 287,538 48,288 421,466
Shares redeemed................................ (370) (4,109) (41,694) (413,459)
------------- --------------- ------------ --------------
Net increase ............................. 25,713 $ 283,429 6,594 $ 8,007
============= =============== ============ ==============
CLASS B
- -------
YEAR ENDED YEAR ENDED
JULY 31, 2004 JULY 31, 2003
------------------------------- -----------------------------
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------
Shares subscribed.............................. - $ - - $ -
Shares redeemed................................ - - (8) (75)
------------- --------------- ------------ --------------
Net decrease.............................. - $ - (8) $ (75)
============= =============== ============ ==============
19
DAVIS RESEARCH FUND
NOTES TO FINANCIAL STATEMENTS - (Continued)
July 31, 2004
================================================================================
NOTE 5 - CAPITAL STOCK - (CONTINUED)
CLASS C
- -------
YEAR ENDED YEAR ENDED
JULY 31, 2004 JULY 31, 2003
------------------------------- -----------------------------
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------
Shares subscribed.............................. - $ - - $ -
Shares redeemed................................ - - (8) (75)
------------- --------------- ------------ --------------
Net decrease.............................. - $ - (8) $ (75)
============= =============== ============ ==============
NOTE 6 - EXPENSES PAID INDIRECTLY
Under an agreement with the custodian bank, custodian fees are reduced for
earnings on cash balances maintained at the custodian by the Fund. Such
reductions amounted to $19 during the year ended July 31, 2004.
NOTE 7 - BANK BORROWINGS
The Fund may borrow up to 5% of its assets from a bank to purchase portfolio
securities, or for temporary and emergency purposes. The purchase of securities
with borrowed funds creates leverage in the Fund. The Fund has entered into an
agreement, which enables it to participate with certain other Davis Funds in an
unsecured line of credit with a bank, which permits borrowings up to $50
million, collectively. Interest is charged based on its borrowings, at a rate
equal to the overnight Federal Funds Rate plus 0.75%. The Fund had no borrowings
outstanding for the year ended July 31, 2004.
NOTE 8 - LITIGATION MATTERS
On June 2, 2004, a proposed class action lawsuit was filed in the United
States District Court for the Southern District of New York on behalf of
investors in certain mutual funds ("Funds") managed by Davis Selected Advisers
L.P. ("Davis Advisors") including the Davis Research Fund. The plaintiffs claim
that Davis Advisors and its affiliates, and the individual directors of the
Funds (collectively the "Defendants") used Fund assets to pay brokers to market
the Funds and that the Defendants disguised such payments as brokerage
commissions and further failed to disclose such payments in public filings or
elsewhere. The lawsuit seeks damages of unspecified amounts. Three substantially
identical proposed class action lawsuits were filed against the Defendants later
in June and July 2004 in the United States Court for the Southern District of
New York. Davis Advisors believes the actions are without merit and the
Defendants intend to vigorously defend the proceedings. Although no
determination can be made at this time, the Fund does not expect this lawsuit to
have a material adverse effect on the assets or results of the Fund.
20
DAVIS RESEARCH FUND
FINANCIAL HIGHLIGHTS
CLASS A
================================================================================
Financial Highlights for a share of capital stock outstanding throughout the
period.
OCTOBER 31, 2001
(COMMENCEMENT
OF OPERATIONS)
YEAR ENDED JULY 31, THROUGH
--------------------------- JULY 31,
2004 2003 2002
---- ---- ----
Net Asset Value, Beginning of Period........... $ 9.93 $ 8.23 $ 10.00
------- ------- -------
Income (Loss) From Investment Operations
- ----------------------------------------
Net Investment Income..................... 0.06 0.07 0.06
Net Realized and Unrealized Gains (Losses) 1.18 1.69 (1.82)
------- ------- -------
Total From Investment Operations........ 1.24 1.76 (1.76)
Dividends and Distributions
- ---------------------------
Dividends from Net Investment Income...... (0.07) (0.06) (0.01)
------- ------- -------
Net Asset Value, End of Period................ $ 11.10 $ 9.93 $ 8.23
======= ======= =======
Total Return (1)............................... 12.50% 21.56% (17.62)%
- -------------
Ratios/Supplemental Data
- ------------------------
Net Assets, End of Period (000 omitted)... $29,528 $26,169 $21,623
Ratio of Expenses to Average Net Assets... 0.99% 1.03% 1.05%*
Ratio of Net Investment Income to Average
Net Assets.............................. 0.60% 0.87% 0.81%*
Portfolio Turnover Rate(2)................ 44% 119% 45%
(1)Assumes hypothetical initial investment on the business day before the first
day of the fiscal period (or inception of offering), with all dividends and
distributions reinvested in additional shares on the reinvestment date, and
redemption at the net asset value calculated on the last business day of the
fiscal period. Sales charges are not reflected in the total returns. Total
returns are not annualized for periods of less than one year.
(2)The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities
owned during the period. Securities with a maturity or expiration date at the
time of acquisition of one year or less are excluded from the calculation.
* Annualized
SEE NOTES TO FINANCIAL STATEMENTS
21
DAVIS RESEARCH FUND
FINANCIAL HIGHLIGHTS
CLASS B
================================================================================
Financial Highlights for a share of capital stock outstanding throughout the
period.
OCTOBER 31, 2001
(COMMENCEMENT
OF OPERATIONS)
YEAR ENDED JULY 31, THROUGH
------------------------- JULY 31,
2004 2003 2002
---- ---- ----
Net Asset Value, Beginning of Period........... $ 9.79 $ 8.17 $ 10.00
------- ------- -------
Income (Loss) From Investment Operations
- ----------------------------------------
Net Investment Loss....................... (0.09) (0.06) (0.02)
Net Realized and Unrealized Gains (Losses) 1.16 1.68 (1.81)
------- ------- -------
Total From Investment Operations........ 1.07 1.62 (1.83)
Net Asset Value, End of Period................ $ 10.86 $ 9.79 $ 8.17
======= ======= =======
Total Return (1).............................. 10.93% 19.83% (18.30)%
- -------------
Ratios/Supplemental Data
- ------------------------
Net Assets, End of Period (000 omitted)... $1 $1 $1
Ratio of Expenses to Average Net Assets... 2.05% 2.06% 2.04%*
Ratio of Net Investment Loss to Average
Net Assets.............................. (0.46)% (0.16)% (0.18)%*
Portfolio Turnover Rate(2)................ 44% 119% 45%
(1) Assumes hypothetical initial investment on the business day before the first
day of the fiscal period (or inception of offering), with all dividends and
distributions reinvested in additional shares on the reinvestment date, and
redemption at the net asset value calculated on the last business day of the
fiscal period. Sales charges are not reflected in the total returns. Total
returns are not annualized for periods of less than one year.
(2) The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities
owned during the period. Securities with a maturity or expiration date at
the time of acquisition of one year or less are excluded from the
calculation.
* Annualized
SEE NOTES TO FINANCIAL STATEMENTS
22
DAVIS RESEARCH FUND
FINANCIAL HIGHLIGHTS
CLASS C
================================================================================
Financial Highlights for a share of capital stock outstanding throughout the
period.
OCTOBER 31, 2001
(COMMENCEMENT
OF OPERATIONS)
YEAR ENDED JULY 31, THROUGH
------------------------- JULY 31,
2004 2003 2002
---- ---- ----
Net Asset Value, Beginning of Period........... $ 9.79 $ 8.17 $ 10.00
------- ------- -------
Income (Loss) From Investment Operations
- ----------------------------------------
Net Investment Loss....................... (0.09) (0.06) (0.02)
Net Realized and Unrealized Gains (Losses) 1.16 1.68 (1.81)
------- ------- -------
Total From Investment Operations........ 1.07 1.62 (1.83)
Net Asset Value, End of Period................ $ 10.86 $ 9.79 $ 8.17
======= ======= =======
Total Return (1)............................... 10.93% 19.83% (18.30)%
- -------------
Ratios/Supplemental Data
- ------------------------
Net Assets, End of Period (000 omitted)... $1 $1 $1
Ratio of Expenses to Average Net Assets... 2.05% 2.06% 2.04%*
Ratio of Net Investment Loss to Average
Net Assets.............................. (0.46)% (0.16)% (0.18)%*
Portfolio Turnover Rate(2)................ 44% 119% 45%
(1) Assumes hypothetical initial investment on the business day before the first
day of the fiscal period (or inception of offering), with all dividends and
distributions reinvested in additional shares on the reinvestment date, and
redemption at the net asset value calculated on the last business day of the
fiscal period. Sales charges are not reflected in the total returns. Total
returns are not annualized for periods of less than one year.
(2) The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities
owned during the period. Securities with a maturity or expiration date at
the time of acquisition of one year or less are excluded from the
calculation.
* Annualized
SEE NOTES TO FINANCIAL STATEMENTS
23
DAVIS RESEARCH FUND
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
================================================================================
TO THE SHAREHOLDERS AND BOARD OF DIRECTORS
OF DAVIS NEW YORK VENTURE FUND, INC.:
We have audited the accompanying statement of assets and liabilities of
Davis Research Fund (a series of Davis New York Venture Fund, Inc.), including
the schedule of investments, as of July 31, 2004, and the related statement of
operations for the year then ended, the statements of changes in net assets for
each of the two years in the period then ended, and the financial highlights for
each of the two years in the period then ended and the period from October 31,
2001 (commencement of operations) to July 31, 2002. These financial statements
and financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of July 31, 2004, by correspondence with the
custodian. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Davis Research Fund as of July 31, 2004, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each of
the two years in the period then ended and the period from October 31, 2001
(commencement of operations) to July 31, 2002, in conformity with U.S. generally
accepted accounting principles.
/s/ KPMG LLP
Denver, Colorado
September 10, 2004
24
DAVIS RESEARCH FUND
FOR THE YEAR ENDED JULY 31, 2004 (UNAUDITED)
================================================================================
FEDERAL INCOME TAX INFORMATION
In early 2005, shareholders will receive information regarding all
dividends and distributions paid to them by the Fund during calendar year 2004.
Regulations of the U.S. Treasury Department require the Fund to report this
information to the Internal Revenue Service.
During the fiscal year ended July 31, 2004, $188,738 of dividends paid by
the Fund constituted net investment income dividends for Federal income tax
purposes.
Dividends paid by the Fund during the fiscal year ended July 31, 2004
which are not designated as capital gain distribution should be multiplied by
55% to arrive at the net amount eligible for the corporate dividends-received
deduction.
For the fiscal year ended July 31, 2004 certain dividends paid by the
Fund constitute qualified dividend income for Federal income tax purposes. The
Fund designates $104,568 as qualified dividend income.
The foregoing information is presented to assist shareholders in
reporting distributions received from the Fund to the Internal Revenue Service.
Because of the complexity of the federal regulations which may affect your
individual tax return and the many variations in state and local tax
regulations, we recommend that you consult your tax adviser for specific
guidance.
PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES
The Fund has adopted Portfolio Proxy Voting Policies and Procedures under
which the Fund votes proxies relating to securities held by the Fund. A
description of the Fund's Portfolio Proxy Voting Policies and Procedures is
available (i) without charge, upon request, by calling the Fund toll-free at
1-800-279-2279, (ii) on the Fund's website at www.davisfunds.com, and (iii) on
the SEC's website at www.sec.gov.
In addition, the Fund is required to file Form N-PX, with its complete
proxy voting record for the 12 months ended June 30th, no later than August 31st
of each year. The Fund's Form N-PX filing is available (i) without charge, upon
request, by calling the Fund toll-free at 1-800-279-2279, (ii) on the Fund's
website at www.davisfunds.com, and (iii) on the SEC's website at www.sec.gov.
FORM N-Q
The Fund files its complete schedule of portfolio holdings with the SEC for
the first and third quarters of each fiscal year on Form N-Q. The Fund's Form
N-Q is available without charge upon request by calling 1-800-279-2279 or on the
fund's website at www.davisfunds.com or on the SEC's website at www.sec.gov. The
Fund's Form N-Q may be reviewed and copied at the SEC's Public Reference Room in
Washington, DC, and that information on the operation of the Public Reference
Room may be obtained by calling 1-800-SEC-0330.
25
DAVIS RESEARCH FUND
2949 East Elvira Road, Suite 101
Tucson, Arizona 85706
================================================================================
DIRECTORS
For the purposes of their service as directors to the Davis Funds, the business
address for each of the directors is 2949 E. Elvira Road, Suite 101, Tucson, AZ
85706. Each Director serves until their retirement, resignation, death or
removal. Directors must retire at the close of business on the last day of the
calendar year in which the Director attains age seventy-two (72), except that
any person who was a Director on July 1, 1994, and at that date was
seventy-three (73) years of age or less shall retire from the Board of Directors
and cease being a Director at the close of business on the last day of the year
in which the Director attains age seventy-four (74).
NUMBER OF
TERM OF PORTFOLIOS IN
OFFICE AND PRINCIPAL FUND COMPLEX
POSITION(S) LENGTH OF OCCUPATION(S) DURING OVERSEEN BY OTHER DIRECTORSHIPS HELD BY
NAME AND AGE HELD WITH FUND TIME SERVED PAST FIVE YEARS DIRECTOR DIRECTOR
- ------------------ ---------------- -------------- ------------------------ ---------------- -------------------------------
INDEPENDENT DIRECTORS
WESLEY E. Director director President of Bass & 11 none
BASS, JR. since 1990 Associates (financial
(born 8/21/31) consulting); formerly
First Deputy City
Treasurer, City of Chicago;
and Executive Vice President,
Chicago Title and Trust
Company (bank and trust).
MARC P. BLUM Director director Chief Executive 11 Director, Legg Mason Trust
(born 9/9/42) since 1986 Officer, World Total (asset management company)
Return Fund, LLLP; Of and Rodney Trust Company
Counsel to Gordon, (Delaware); Former Director,
Feinblatt, Rothman, Mid-Atlantic Realty Trust
Hoffberger and (real estate investment
Hollander, LLC (law trust); Trustee, College of
firm). Notre Dame of Maryland,
McDonogh School and other
public charities, private
foundations, and businesses.
THOMAS S. GAYNER Director director Chief Investment 11 Markel Corporation.
(born 12/16/61) since 2004 Officer Markel
Corporation (insurance
company).
JERRY D. GEIST Director director Chairman, Santa Fe 11 Director, CH2M-Hill, Inc.
(born 5/23/34) since 1986 Center Enterprises (engineering);Chairman, Santa
(energy project Fe Center Enterprises,
development); Retired Investment Committee for
Chairman and Microgeneration Technology
President, Public Fund, UTECH Funds.
Service Company of New
Mexico.
26
DAVIS RESEARCH FUND
2949 East Elvira Road, Suite 101
Tucson, Arizona 85706
================================================================================
DIRECTORS - (CONTINUED)
NUMBER OF
TERM OF PORTFOLIOS IN
OFFICE AND PRINCIPAL FUND COMPLEX
POSITION(S) LENGTH OF OCCUPATION(S) DURING OVERSEEN BY OTHER DIRECTORSHIPS HELD BY
NAME AND AGE HELD WITH FUND TIME SERVED PAST FIVE YEARS DIRECTOR DIRECTOR
- ------------------ ---------------- -------------- ------------------------ ---------------- -------------------------------
INDEPENDENT DIRECTORS - CONTINUED
D. JAMES GUZY Director director Chairman, PLX 11 Director, Intel Corp.
(born 3/7/36) since 1982 Technology, Inc. (semi-conductor
(semi-conductor manufacturer), Cirrus Logic
manufacturer). Corp. (semi-conductor
manufacturer), Alliance
Technology Fund (a mutual
fund), Micro Component
Technology, Inc.
(micro-circuit handling and
testing equipment
manufacturer), LogicVision,
Inc. (semi-conductor software
company), and Tessera
Technologies, Inc.
(semi-conductor packaging
company); Former Director,
Novellus Systems, Inc.
(semi-conductor manufacturer).
G. BERNARD Director director Managing General 11 none
HAMILTON since 1978 Partner, Avanti
(born 3/18/37) Partners, L.P.
(investment
partnership).
ROBERT P. Director director Chairman, Northroad 11 none
MORGENTHAU since 2002 Capital Management,
(born 3/22/57) LLC (an investment
management firm) since June
2002; President of Private
Advisory Services of Bank of
America (an investment
management firm) from 2001
until 2002; prior to that a
managing director and global
head of marketing and
distribution for Lazard Asset
Management (an investment
management firm) for ten
years.
THEODORE B. Director director Chairman of John 11 Mayor of the Incorporated
SMITH, JR. since 1994 Hassall, Inc. Village of Mill Neck.
(born 12/23/32) (fastener
manufacturing);
Chairman of Cantrock
Realty.
27
DAVIS RESEARCH FUND
2949 East Elvira Road, Suite 101
Tucson, Arizona 85706
================================================================================
DIRECTORS - (CONTINUED)
NUMBER OF
TERM OF PORTFOLIOS IN
OFFICE AND PRINCIPAL FUND COMPLEX
POSITION(S) LENGTH OF OCCUPATION(S) DURING OVERSEEN BY OTHER DIRECTORSHIPS HELD BY
NAME AND AGE HELD WITH FUND TIME SERVED PAST FIVE YEARS DIRECTOR DIRECTOR
- ------------------ ---------------- -------------- ------------------------ ---------------- -------------------------------
INDEPENDENT DIRECTORS - CONTINUED
CHRISTIAN R. Director director General Partner of 11 none
SONNE since 1990 Tuxedo Park Associates
(born 5/6/36) (land holding and
development firm);
President and Chief
Executive Officer of
Mulford Securities
Corporation (private
investment fund) until
1990; formerly Vice
President of Goldman
Sachs & Co.
(investment banking).
MARSHA WILLIAMS Director director Executive Vice 14 Director of the Selected
(born 3/28/51) since 1999 President and Chief Funds (consisting of three
Financial Officer of portfolios) since 1996;
Equity Office Director, Modine
Properties Trust (a Manufacturing, Inc. (heat
real estate investment transfer technology);
trust); Former Chief Director, Chicago Bridge &
Administrative Officer Iron Company, N.V.
of Crate & Barrel (industrial construction and
(home furnishings engineering).
retailer); former Vice
President and
Treasurer, Amoco
Corporation (oil & gas
company).
INSIDE DIRECTORS*
JEREMY H. BIGGS Director/ director Vice Chairman, Head of 11 Former Director of the Van
(born 8/16/35) Chairman since 1994 Equity Research, Eck/Chubb Funds six
Chairman of U.S. portfolios (mutual fund).
Investment Policy
Committee and Member
of the International
Investment Committee,
all for Fiduciary
Trust Company
International (money
management firm)
Consultant to Davis
Selected Advisers,
L.P.
28
DAVIS RESEARCH FUND
2949 East Elvira Road, Suite 101
Tucson, Arizona 85706
================================================================================
DIRECTORS - (CONTINUED)
NUMBER OF
TERM OF PORTFOLIOS IN
OFFICE AND PRINCIPAL FUND COMPLEX
POSITION(S) LENGTH OF OCCUPATION(S) DURING OVERSEEN BY OTHER DIRECTORSHIPS HELD BY
NAME AND AGE HELD WITH FUND TIME SERVED PAST FIVE YEARS DIRECTOR DIRECTOR
- ------------------ ---------------- -------------- ------------------------ ---------------- -------------------------------
INSIDE DIRECTORS* - CONTINUED
ANDREW A. DAVIS Director director President or Vice 14 Director of the Selected
(born 6/25/63) since 1997 President of each Funds (consisting of three
Davis Fund and portfolios) since 1998.
Selected Fund;
President, Davis
Selected Advisers,
L.P., and also serves
as an executive
officer in certain
companies affiliated
with the Adviser.
CHRISTOPHER C. Director director Chief Executive 14 Director of the Selected
DAVIS since 1997 Officer, President or Funds (consisting of three
(born 7/13/65) Vice President of each portfolios) since 1998.
Davis Fund and
Selected Fund;
Chairman and Chief
Executive Officer,
Davis Selected
Advisers, L.P., and
also serves as an
executive officer in
certain companies
affiliated with the
Adviser, including
sole member of the
Adviser's general
partner, Davis
Investments, LLC;
Employee of Shelby
Cullom Davis & Co.
(registered
broker/dealer).
* Jeremy H. Biggs, Andrew A. Davis and Christopher C. Davis own partnership
units (directly, indirectly or both) of the Adviser and are considered to be
"interested persons" of the Funds as defined in the Investment Company Act of
1940. Andrew A. Davis and Christopher C. Davis are brothers.
29
DAVIS RESEARCH FUND
2949 East Elvira Road, Tucson, Arizona 85706
================================================================================
DIRECTORS OFFICERS
Wesley E. Bass, Jr. Jeremy H. Biggs
Jeremy H. Biggs Chairman
Marc P. Blum Christopher C. Davis
Andrew A. Davis President
Christopher C. Davis Andrew A. Davis
Thomas S. Gaynor Vice President
Jerry D. Geist Kenneth C. Eich
D. James Guzy Executive Vice President &
G. Bernard Hamilton Principal Executive Officer
Robert P. Morgenthau Sharra L. Reed
Theodore B. Smith, Jr. Vice President & Chief Compliance
Christian R. Sonne Officer
Marsha Williams Douglas A. Haines
Vice President
& Principal Accounting Officer
Thomas D. Tays
Vice President & Secretary
INVESTMENT ADVISER
Davis Selected Advisers, L.P. (doing business as "Davis Advisors")
2949 East Elvira Road, Suite 101
Tucson, Arizona 85706
(800) 279-0279
DISTRIBUTOR
Davis Distributors, LLC
2949 East Elvira Road, Suite 101
Tucson, Arizona 85706
TRANSFER AGENT & CUSTODIAN
State Street Bank and Trust Company
c/o The Davis Funds
P.O. Box 8406
Boston, Massachusetts 02266-8406
COUNSEL
Seyfarth Shaw LLP
55 East Monroe Street, Suite 4200
Chicago, Illinois 60603-5803
AUDITORS
KPMG LLP
707 Seventeenth Street
Suite 2700
Denver, Colorado 80202
================================================================================
FOR MORE INFORMATION ABOUT DAVIS RESEARCH FUND INCLUDING MANAGEMENT FEE,
CHARGES, AND EXPENSES, SEE THE CURRENT PROSPECTUS, WHICH MUST PRECEDE OR
ACCOMPANY THIS REPORT. THE FUND'S STATEMENT OF ADDITIONAL INFORMATION CONTAINS
ADDITIONAL INFORMATION ABOUT THE FUND'S DIRECTORS AND IS AVAILABLE WITHOUT
CHARGE UPON REQUEST BY CALLING 1-800-279-0279.
================================================================================
30
ITEM 2. CODE OF ETHICS
The registrant has adopted a code of ethics that applies to the
registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing
similiar functions.
The code of ethics was amended effective November 1, 2003. Items
amended include notifying the Chief Legal Officer of any violations to
the code. The other amended item is maintaining each version of the
code for a period of six years.
Additionally, Exhibit A of the code of ethics was amended
September 14, 2004 to reflect Douglas A. Haines as Principal Financial
Officer and Principal Accounting Officer.
A copy of the code of ethics is filed as an exhibit to this form N-CSR.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
The registrant's board of directors has determined that independant
trustee Marsha Williams qualifies as the "audit committee financial
expert", as defined in Item 3 of form N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES
(a) Audit Fees. The aggregate Audit Fees billed by KPMG LLP ("KPMG")
for professional services rendered for the audits of the financial
statements, or services that are normally provided in connection
with statutory and regulatory filings or engagements for the fiscal
year ends July 31, 2004 and July 31, 2003 were $96,284 and
$99,716, respectively.
(b) Audit-Related Fees. The aggregate Audit-Related Fees billed by
KPMG for services rendered for assurance and related services that
are not reasonably related to the performance of the audit or
review of the fund financial statements, but not reported as Audit
Fees for the fiscal year ends July 31, 2004 and July 31, 2003
were $0 and $0, respectively.
(c) Tax Fees. The aggregate Tax Fees billed by KPMG for professional
services rendered for tax compliance, tax advise and tax planning
for the fiscal year ends July 31, 2004 and July 31, 2003 were
$8,740 and $12,915, respectively.
Fees included in the Tax Fee category comprise all services
performed by professional staff in the independent accountant's
tax division except those services related to the audit. These
services include preparation of tax returns, tax advice related to
mergers and a review of the fund income and capital gain
distributions.
(d) All Other Fees. The aggregate Other Fees billed by KPMG for all
other non-audit services rendered to the fund for the fiscal year
ends July 31, 2004 and July 31, 2003 were $2,000 and $0,
respectively.
Fees included in the Other Fee category include consents for a
offering of new Class R shares in Davis New York Venture Fund.
(e)(1) Audit Committee Pre-Approval Policies and Procedures.
The fund Audit Committee must pre-approve all audit and non-audit
services provided by the independent accountant relating to the
operations or financial reporting of the funds. Prior to the
commencement of any audit or non-audit services to a fund, the
Audit Committee reviews the services to determine whether they are
appropriate and permissible under applicable law.
The fund Audit Committee has adopted a policy whereby audit and
non-audit services performed by the fund independent accountant
require pre-approval in advance at regularly scheduled Audit
Committee meetings. If such a service is required between
regularly scheduled Audit Committee meetings, pre-approval may be
authorized by the Audit Committee Chairperson with ratification at
the next scheduled audit committee meeting.
(2) No services included in (b) - (d) above were approved pursuant to
paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) Not applicable
(g) The Funds' independent accountant did not provide any services to
the investment advisor or any affiliate for the fiscal years ended
July 31, 2004 and July 31, 2003. The fund has not paid any fees
for non-audit not previously disclosed in items 4 (b)-(d).
(h) The registrant's audit committee of the board of trustees has
considered whether the provision of non-audit services that were
rendered to the registrant's investment adviser, and any entity
controlling, controlled by, or under common control with the
investment adviser that provides ongoing services to the registrant
that were not pre-approved pursuant to paragraph (c)(7)(ii) of
Rule 2-01 of Regulation S-X is compatible with maintaining the
principal accountant's independence. No such services were
rendered.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS - Not Required
ITEM 6. SCHEDULE OF INVESTMENTS - Not Applicable
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES - Not Applicable
ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT
INVESTMENT COMPANY AND AFFILIATED PERSONS - Not Applicable
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There have been no changes to the procedures by which shareholders
may recommend nominees to the registrant's Board of Trustees.
ITEM 10. CONTROLS AND PROCEDURES
(a) The registrant's principal executive officer and principal financial
officer have concluded that the registrant's disclosure controls and
procedures (as defined in Rule 30a-2(c) under the Investment Company
Act of 1940, as amended) are effective as of a date within 90 days
of the filing date of this report.
(b) There have been no significant changes in the registrant's internal
controls or in other factors that could significantly affect these
controls.
ITEM 11. EXHIBITS
EX-99.CODE ETH - Code of Ethics
EX-99.CERT - Section 302 Certification
EX-99.906 CERT - Section 906 CertificationITEM 11. EXHIBITS
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 it behalf by the undersigned, thereunto duly authorized.
DAVIS NEW YORK VENTURE FUND, INC.
By /s/ Kenneth C. Eich
Kenneth C. Eich
Principal Executive Officer
Date: October 6, 2004
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By /s/ Kenneth C. Eich
Kenneth C. Eich
Principal Executive Officer
Date: October 6, 2004
By /s/ Douglas A. Haines
Douglas A. Haines
Principal Financial officer
Date: October 6, 2004